When the Contract Rate of Interest on Bonds Is Equal

question 76

Multiple Choice

When the contract rate of interest on bonds is equal to the market rate of interest, bonds sell at:

• A) a premium.
• B) their face value.
• C) their maturity value.
• D) a discount.

---

Definitions:

Equivalent Unit

An equivalent unit is a measure used in cost accounting to quantify the amount of materials or labor in terms of finished goods units.

Process Costing

A cost accounting method used when homogenous products are produced on a continuous basis, allocating costs to each processing department or stage.

Conversion Costs

The sum of labor and overhead costs necessary to convert raw materials into finished products.

Forming Department

This is a specific section within a manufacturing facility where raw materials are shaped into components or products.