Match Each of the Following Terms with the Appropriate Definitions

question 145

Short Answer

Match each of the following terms with the appropriate definitions.
(a) Discount on bonds
(b) Callable bonds
(c) Annuity
(d) Debt-to-equity ratio
(e) Sinking fund bonds
(f) Secured bonds
(g) Carrying value
(h) Premium on bonds
(i) Bond indenture
(j) Contract rate

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs (direct labor, direct materials, and both variable and fixed overhead) in the cost of a product.

Variable Costing

An accounting method that considers only variable costs for product costing, excluding fixed manufacturing overhead from the cost of goods sold.

Income Statement

A financial report that shows the company's revenues and expenses over a specified period, resulting in net profit or loss.

Absorption Costing

A financial approach that incorporates every aspect of manufacturing expenses, such as direct materials, direct labor, and all variable and fixed overhead costs, into the price of a product.