Which of the Following Is True of the Premium on Bonds

question 151

Multiple Choice

Which of the following is true of the Premium on Bonds Payable account?

• A)It is added to the Bonds Payable balance and shown with long-term liabilities on the balance sheet.
• B)It is added to the Bonds Payable balance and shown with stockholders' equity on the balance sheet.
• C)It is subtracted from the Bonds Payable balance and shown with long-term liabilities on the balance sheet.
• D)It is subtracted from the Bonds Payable balance and shown with the current liabilities on the balance sheet.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much contribution towards covering fixed costs and generating profit.

Variable Costs

Expenses that vary directly with the level of production or sales volume.

Selling Price

The price at which a product or service is offered for sale to consumers.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the profitability of a company's core activities.