Which of the Following Is Not a True Statement About

question 158

Multiple Choice

Which of the following is not a true statement about the accounting for debt investments?

• A) At acquisition the historical cost principle applies.
• B) The cost includes any brokerage fees.
• C) Debt investments include investments in government and corporation bonds.
• D) The cost includes any accrued interest.

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Definitions:

Amortized

Refers to the process of gradually paying off a debt or spreading out the cost of an intangible asset over its useful life.

Intangible Assets

Intangible assets are non-physical assets having value due to their intellectual or contractual rights and may include patents, trademarks, and goodwill.

Trademarks

Symbols, names, phrases, or logos registered or established by use as representing a company or product.

Goodwill

The intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, representing future economic benefits.