Amortizing the Discount on a Bond Payable

question 72

Multiple Choice

Amortizing the discount on a bond payable:

• A) increases the carrying amount of the bonds
• B) increases the face value of the bonds
• C) decreases the carrying amount of the bonds
• D) decreases the face value of the bonds

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Definitions:

Savings

Money set aside from personal income for future use, often placed in secure accounts or investments for growth or as a safeguard.

Disposable Income

Funds households are left with for saving or expenditure after income taxes are taken out.

APC (Average Propensity to Consume)

The fraction of income that is spent on consumption as opposed to savings.

Disposable Income

The amount of money available to households for making purchases and savings after the removal of income taxes.