Reich, Inc

question 45

Multiple Choice

Reich, Inc. issued bonds with a maturity amount of $200,000 and a maturity ten years from date of issue. If the bonds were issued at a premium, this indicates that

• A) the effective yield or market rate of interest exceeded the stated (nominal) rate.
• B) the nominal rate of interest exceeded the market rate.
• C) the market and nominal rates coincided.
• D) no necessary relationship exists between the two rates.

---

Definitions:

Qualitative Characteristic

Attributes that describe the non-quantifiable aspects of financial information that help ensure its usefulness for decision-making.

Accounting Information

Data related to the financial transactions and status of an organization, which is used for decision-making, planning, and financial reporting.

Economic Condition

Economic condition refers to the current state of the economy, encompassing aspects like growth rates, inflation, unemployment, and overall financial health.

GAAP's Goals

The objectives of Generally Accepted Accounting Principles, which include ensuring the reliability, consistency, and comparability of financial reporting.