Which of the Following Is Commonly Used in Accounting Analysis

question 5

Multiple Choice

Which of the following is commonly used in accounting analysis to show a relationship between two elements of a firm's financial statements?

• A) comparative number
• B) maxim
• C) financial ratio
• D) formula

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Definitions:

Par Value

The face value of a bond or the stock value stated in the corporate charter, which is often a nominal amount.

Call Premium

The extra amount over the par value that a buyer must pay to purchase a call option, which gives the right, but not the obligation, to buy an asset at a specified price.

Zero-Coupon Bond

A type of bond that is sold at a discount to its face value, pays no interest (coupon), and is redeemed at its face value at maturity.

Face Value

The nominal value or dollar value of a security stated by the issuer, also known as the "par value" especially in the context of bonds.