If Bonds with a Face Value of $100,000 Are Sold

question 136

Multiple Choice

If bonds with a face value of $100,000 are sold at 102,the amount of cash proceeds is:

• A) $108,800.
• B) $100,000.
• C) $99,898.
• D) $102,000.

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Definitions:

Operating Expense

Expenses incurred through normal business operations, such as rent, utilities, and payroll, exclusive of cost of goods sold.

Refund Liability

An obligation recorded by a business to return funds to a customer for returned or unsatisfactory goods or services.

Deferred Revenue

Income received in advance for products or services which is recorded as a liability until it is earned.

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a reversal of revenue previously recognized.