Bond discounts should be amortized to comply with the
A) revenue recognition principle.
B) matching process.
C) cost principle.
D) full disclosure principle.

Question

Quizplus · Accepted Answer

Bond discounts should be amortized to comply with the matching process. The matching principle requires that expenses be recognized in the same period as the revenue they help generate. Amortizing the bond discount over the life of the bond helps align the cost of issuing the bond (the discount) with the periods in which the bond generates revenue.

Bond Discounts Should Be Amortized to Comply with the