Which of the Following Is True of a Discount on Bonds

question 86

Multiple Choice

Which of the following is true of a Discount on Bonds Payable account?

• A)It is added to the Bonds Payable balance and shown with long-term liabilities on the balance sheet.
• B)It is subtracted from the Bonds Payable balance and shown with the current liabilities on the balance sheet.
• C)It is added to the Bonds Payable balance and shown with owner's equity on the balance sheet.
• D)It is subtracted from the Bonds Payable balance and shown with long-term liabilities on the balance sheet.

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Definitions:

Bank Charges

Fees assessed by a bank for its services or as penalties for not meeting specific account requirements.

Bank Statement Adjustment

Bank Statement Adjustment involves correcting discrepancies between a company’s accounting records and its bank account statement, to reflect the accurate amount of cash available.

Company Books Adjustment

Modifications or corrections made to the accounting records of a company to ensure their accuracy and completeness.

Deposit In Transit

Funds that have been received and recorded by a company but not yet credited by its bank, often seen in bank reconciliation processes.