In Practice, Under the Cost/amortized Cost Method and ASPE, Any

question 79

Multiple Choice

In practice, under the cost/amortized cost method and ASPE, any discount or premium on a bond investment is

• A) required to be recognized and reported separately, and amortized using the effective-interest rate method.
• B) not recognized or reported separately; amortized using either the straight-line or effective-interest method.
• C) not recognized or reported separately; amortized using the effective-interest method.
• D) required to be recognized and reported separately, and amortized using the straight-line method.

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Definitions:

Interlocking Minerals

Minerals that grow together and interlock their crystals, often found in igneous rocks.

Eroded Rocks

Rocks that have been worn down or broken apart by the forces of weathering and erosion.

Cleavage

The tendency of a mineral to break along smooth flat surfaces according to its crystal structure.

Luster

The way a mineral reflects light from its surface, which can be metallic, glassy, dull, etc., and is used in mineral identification.