Which of the Following Is Not Generally Correct About Recording

question 45

Multiple Choice

Which of the following is not generally correct about recording a sale of a debt security before the 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 Premium on
• D)A gain or loss on the sale is not extraordinary.

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Definitions:

Absolute Advantage

The ability of an individual, firm, or country to produce more of a good or service than competitors, using the same amount of resources.

Hamburgers

A type of food consisting of a cooked patty of ground meat, typically beef, placed inside a sliced bread roll or bun.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than others.

Opportunity Cost

The value of the best alternative foregone as a result of making a decision, a fundamental concept in economics that emphasizes the cost of trade-offs.