Which of the Following Is Not a Characteristic of Debt

question 23

Multiple Choice

Which of the following is not a characteristic of debt?

• A)It may make it possible to balance the peaks and valleys in one's spending pattern.
• B)It does not help one even out life cycle style needs.
• C)It allows an outlay for a significant capital expenditure.
• D)All of the above are characteristics of debt.
• E)None of the above are characteristics of debt.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds over a period, reported on the income statement.

Income Before Taxes

The earnings of a company before taxes have been deducted.

Employer Payroll Taxes

Taxes that employers are required to pay on behalf of their employees, including social security and Medicare taxes.

Social Security Tax

A mandatory payroll tax collected to fund the Social Security program, providing retirement, disability, and survivors' benefits.