If a Company Uses the Effective Interest Method of Amortizing

question 97

Multiple Choice

If a company uses the effective interest method of amortizing a bond discount,the interest expense that is recognized each year

• A)will be greater than the interest payment.
• B)will increase from year to year.
• C)will remain the same from year to year.
• D)will be greater than the interest payment and also will increase from year to year.

---

Definitions:

Median

The middle value in a dataset, dividing the data into two halves when sorted, and a measure of central tendency.

Evenly Distributed

A condition where elements are spread out uniformly over a certain area or within a set.

Graphics

Visual elements such as pictures, charts, and graphs, used to illustrate or enhance text.

Positive Skew

A distribution shape where most values are clustered towards the left, with a long tail to the right.