A Gain Is Earned When Retiring Bonds Before Their Maturity

question 147

Multiple Choice

A gain is earned when retiring bonds before their maturity date is recognized by

• A) amortizing it over the remaining life of the bond.
• B) making a prior period adjustment.
• C) reporting it as an extraordinary item in the year of retirement.
• D) reporting it as an ordinary item in the year of retirement.

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Definitions:

Retroperitoneal Position

Describes the location of certain organs in the body, indicating that they are situated behind the peritoneum, the membrane lining the abdominal cavity.

Metabolic Wastes

Substances produced during the normal operation of the kidneys and excreted through the urine.

Ureters

Muscular tubes that transport urine from the kidneys to the bladder, playing a critical role in the urinary system.

Uric Acid

A chemical created when the body breaks down substances called purines, high levels of which can lead to gout and other health problems.