Which of the Following Types of Interest Income Is Not

question 52

Multiple Choice

Which of the following types of interest income is not taxed as it is earned?

• A)interest from savings accounts
• B)original issue discounts on corporate bonds
• C)accrued market discount on bonds
• D)interest from money market accounts
• E)all of these

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Definitions:

Commercial Substance

Commercial substance is a concept in accounting that indicates a transaction significantly changes the economic situation of the parties involved.

Trade-In Allowance

The amount a seller credits to a buyer when the buyer returns a previously purchased item as part of the payment for a new item.

Patents

Legal documents granting an inventor exclusive rights to produce, use, and sell an invention for a certain period of time.

Amortized

Gradual reduction of a debt over a period of time through regular payments, which may include portions of both principal and interest.