Which of the Following Statements Regarding Amortization Is True

question 7

Multiple Choice

Which of the following statements regarding amortization is true?

• A) Amortization of the premium causes the premium on bonds payable account to increase.
• B) Amortization of the premium causes the amount of interest expense to increase.
• C) Cash interest payments on bonds equals interest expense on the income statement when there is amortization of bond premium.
• D) Amortization of premium continues over the life of the bond until the balance in the account is reduced to zero.

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Definitions:

Government

The organization or system through which a community or nation is governed, responsible for creating and enforcing rules and managing public resources.

Thomas Jefferson

The third President of the United States, a Founding Father recognized for authoring the Declaration of Independence.

Taxation

The process by which governments impose charges on citizens and corporate entities to fund public expenditures and services.

Jean Baptiste Colbert

was a French politician who served as the Minister of Finances of France under King Louis XIV, known for his policies aimed at strengthening the French economy through mercantilism.