Generally accepted accounting principles (GAAP)allow businesses to use the straight-line amortization method for bond discounts and premiums only when the amounts calculated do not differ significantly from the amounts calculated using the effective-interest method.

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This statement is true. GAAP allows for the use of the straight-line amortization method for bond discounts and premiums, but only if the amounts calculated are not significantly different from those calculated using the effective-interest method. This is because the effective-interest method is considered to be a more accurate way of amortizing bond discounts and premiums over the life of a bond.

Generally Accepted Accounting Principles (GAAP)allow Businesses to Use the Straight-Line