Which of the Following Statements Is False

question 23

Multiple Choice

Which of the following statements is false?

• A) The issuer of a bond is a borrower.
• B) The person who buys a bond is a lender.
• C) Interest earned on corporate bonds is exempt from federal income taxes.
• D) The coupon rate on a bond is the percentage of the face value that the bondholder receives annually until the bond matures.

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Definitions:

Predetermined Overhead Rate

Predetermined overhead rate is calculated by dividing the estimated manufacturing overhead costs by an allocation base, used to apply overhead costs to products.

Machine-Hours

A measure of production time based on the number of hours a machine is operated.

Direct Labor-Hours

Summation of hours by employees directly contributing to manufacturing efforts.

Machining

A manufacturing process involving the cutting, shaping, or finishing of material, typically metal, using machine tools.