In the Previous Year, a Firm Failed to Record Premium

question 31

Multiple Choice

In the previous year, a firm failed to record premium amortization of $40,000 and $30,000, respectively, on its bonds payable and held to maturity bond investments. These errors affect both income before tax and taxable income. The firm's tax rate is 30%. As a result of this error, net income was:

• A) Understated by $7,000.
• B) Overstated by $7,000.
• C) Understated by $33,000.
• D) Overstated by $33,000.

Construct effective sales messages with clear calls to action.

Recognize the importance of closing persuasive messages positively to maintain or repair business relationships.

Understand the role of vivid language and emotional connection in persuasive argumentation.

Evaluate and leverage the benefits of a product or idea in persuasive communication.

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Definitions:

Financial Activities

These involve transactions related to the management, investment, transfer, and expenditure of money by individuals, businesses, and governments.

Lending

The act of providing funds to another party with the expectation that the funds will be repaid, often with interest, at a later date.

Corporate Codes

Policies or guidelines established by companies to dictate behavior, ethics, and responsibilities within the corporate environment.

Labor Abuse Scandals

Incidents or revelations of poor working conditions, exploitation, or violations of workers’ rights within companies or industries.