Which of the Following Statements Regarding the Effective-Interest Method of Accounting

question 32

Multiple Choice

Which of the following statements regarding the effective-interest method of accounting for bonds is false?

• A) GAAP usually requires use of the effective interest method.
• B) The amount of periodic interest expense decreases over the life of a discounted bond issue when the effective-interest method is used.
• C) Over the life of the bonds the carrying value increases for discounted bonds when using the effective-interest method.
• D) The effective-interest method applies a constant percentage to the bond carrying value to compute interest expense.

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Definitions:

Negative Reinforcement

A type of operant conditioning that involves the removal of an unpleasant stimulus to increase the likelihood of a behavior being repeated.

Dull His Feelings

"Dull His Feelings" suggests an attempt to numb or suppress one's emotional responses, often through the use of substances or other coping mechanisms.

Schedule of Reinforcement

A rule or plan for determining the timing and frequency of reinforcement (rewards or punishments) in order to modify behavior.

Fixed Interval

A reinforcement schedule that rewards a response only after a specified time has elapsed, leading to a pattern of response following the reinforcement.