When a Quota Is Imposed on a Market, The

question 59

Multiple Choice

When a quota is imposed on a market, the:

• A)supply curve (above the world price) shifts to the right by the amount of the quota
• B)supply curve (above the world price) shifts to the left by the amount of the quota
• C)demand curve (above the world price) shifts to the right by the amount of the quota
• D)demand curve (above the world price) shifts to the left by the amount of the quota

Identify and apply the correct methods of amortization for bond discounts or premiums.

Distinguish between the book value and market value methods of accounting for convertible bonds and their impact on financial statements.

Recognize the significance and accounting treatment of the issuance of bonds with detachable stock warrants.

Analyze the effects of using incorrect amortization methods on the carrying amount of bonds.

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Definitions:

Bond

A fixed-income investment in which an investor loans money to an entity (typically corporate or governmental) that borrows the funds for a defined period at a variable or fixed interest rate.

Premium

In finance, this term refers to the amount by which the price of a bond or stock exceeds its principal or face value, or to an additional payment above the normal cost.