In the Secondary Market,when the Market Rate of Interest on Bonds

question 32

Multiple Choice

In the secondary market,when the market rate of interest on bonds increases:

• A)bond prices decline
• B)bond prices increase
• C)both b and d are correct
• D)the carrying value of the bonds increases

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Definitions:

Unused Supplies

Supplies that have been purchased but not yet used in the operation of a business.

Prepaid Insurance

An asset account on the balance sheet that represents a payment made for insurance services that have not yet been received or used up within the period of the insurance contract.

Accrued Fees

Fees that have been incurred but not yet paid or recorded by the entity.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.