The Balance in Discount on Bonds Payable

question 3

Multiple Choice

The balance in Discount on Bonds Payable

• A) should be reported on the balance sheet as an asset because it has a debit balance
• B) should be allocated to the remaining periods for the life of the bonds by the straight-line method, if the results obtained by that method materially differ from the results that would be obtained by the interest method
• C) would be added to the related bonds payable to determine the carrying amount of the bonds
• D) would be subtracted from the related bonds payable on the balance sheet

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Definitions:

Random Sampling

A method in statistics for selecting a subset of individuals from a population in such a way that each individual has an equal chance of being selected.

Inductive Argument

Reasoning that moves from specific instances to a generalized conclusion, typically involving probability rather than certainty.

Premises

Statements or ideas that form the basis for a reasoned argument or the background against which an argument is formed.

Conclusion

The statement that logically follows from the premises in a logical argument, often signified by therefore.