Which of the Following Is Not Generally Correct About Recording

question 48

Multiple Choice

Which of the following is not generally correct about recording a sale of a debt security before maturity date?

• A) Accrued interest will be received by the seller even though it is not an interest payment date.
• B) An entry must be made to amortize a discount to the date of sale.
• C) The entry to amortize a premium to the date of sale includes a credit to the Premium on Investments in Debt Securities.
• D) A gain or loss on the sale is not extraordinary.

---

Definitions:

Specialized Tools

Instruments or devices designed for specific tasks or industries, enabling more efficient and precise work in professional and technical fields.

Transaction Cost

Expenses incurred when buying or selling goods or services, beyond the price of the goods or services themselves.

Specialized Resources

Resources uniquely suited or trained to perform specific tasks or functions within an economic system, enhancing efficiency and productivity.

Opportunity Cost

The financial loss associated with rejecting the subsequent optimal choice in any decision-making scenario.