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interest expense bond interest expense. True or False 14. Amortization of a premium increases a discount decreases 15. The interest rate witen in the torms of the bond indenture is called the yield or market rate. True or False Muliple Choice: sold for 2017, net income for 2017, and assets at December 31, 2018, respectively, are a. overstatement, understatement, overstatement b. overstatement, understatement, no effect c. understatement, overstatement, overstatement. d. understatement, overstatement, no effect 7. If the beginning inventory for 2017 ls overstated, the effects of this error on cost of goods 2. The failure to record a purchase of merchandise on account even though the goods are properly included in the physical inventory results in b. an understatement of assets and net income c an understatement of cost of goods sold and liabilities and an overstatement of assets and an overstatement of owners' equity. 3. Which nventory costing mothod most closely approximates current cost for each of the FIFO FIFO LIFO LIFO FIFO LIFO FIFO LIFO a. b. d. Which of the following is not considered an advantage of LIFO when prices are rising? a. The inventory will be overstated. b. The more recent costs are matched against current revenues. c. There will be a deferral of income tax. d. A company's future reported earnings will not be affected substantially by future price Which of the following is true regarding the use of LIFO for inventory valuation? a. If LIFO is used for external financial reporting, then it must also be used for internal reports. For purposes of external financial reporting, LIFO may not be used with the lower of cost or market approach. If LIFO is used for external financial reporting, then it cannot be used for tax purposes. None of these answers are correct

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