During September,the Bug-B-Gone Company Buys and Pays for a Six-Month

question 38

Multiple Choice

During September,the Bug-B-Gone Company buys and pays for a six-month supply of pesticides in order to receive a bulk discount.The company uses accrual basis accounting.The cost of the pesticides is recorded:

• A)immediately as an expense.
• B)as a liability,which will later be reduced as the pesticides are used.
• C)partially as an expense and partially as a liability.
• D)as an asset,which will later be reduced as the pesticides are used.

Comprehend the calculation and significance of interest expense related to bonds.

Recognize the accounting treatment and impact of bond redemption.

Understand the different types of bonds and their specific features.

Understand the concepts and calculations related to bond issuance, including premiums, discounts, and carrying amount.