Which of the Following Is Correct About the Effective-Interest Method

question 67

Multiple Choice

Which of the following is correct about the effective-interest method of amortization?

• A)The effective-interest method applied to debt investments is different from that applied to bonds payable.
• B)Amortization of a discount decreases from period to period.
• C)Amortization of a premium decreases from period to period.
• D)The effective-interest method applies the effective-interest rate to the beginning carrying amount for each interest period.

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Definitions:

Observing Behavior

The act of watching or noting the actions of individuals or groups for the purpose of analysis or study.

Attribution Theory

The view that people act as intuitive scientists when they observe other people’s behavior and infer explanations about why those people acted the way they did.

Intuitive Scientists

A theory suggesting that people often act like amateur scientists, attempting to understand and predict other people's behavior by forming hypotheses and making deductions.

Social Cognition Theory

A theory that focuses on how people process, store, and apply information about other people and social situations, emphasizing the role of cognitive processes in understanding social interaction.