Accounting Information Is Neutral If

question 15

Multiple Choice

Accounting information is neutral if

• A) it is free from bias.
• B) the amount of assets equals the amount of liabilities.
• C) the trial balance balances.
• D) all of the information is present to show the economic reality of the transaction.

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Definitions:

Premium on Bonds

The amount by which the price paid for a bond exceeds its face value, typically because the interest rate it pays is higher than the market rate.

Maturity

The date on which a debt or other borrowing is due to be repaid in full, or when an investment reaches its full value.

Bond's Discount

The difference between the face value of a bond and its selling price when sold for less than its face value.

Amortized

The gradual reduction of a debt over a period of time by making regular payments of interest and principal sufficient to repay the loan by maturity.