A Particular Feature of Callable Bonds Is That They Reduce

question 174

True/False

A particular feature of callable bonds is that they reduce the bondholder's risk by requiring the issuer to create a sinking fund of assets set aside at specified amounts and dates to repay the bonds at maturity.

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Definitions:

Economic Resources Measurement Basis

An accounting principle that focuses on the valuation and reporting of an entity's assets based on their current economic values rather than historical cost.

Modified Accrual Accounting

This accounting method recognizes revenues when they become available and measurable and expenses when incurred, blending elements of both cash and accrual accounting.

Accrual Accounting

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is received or paid.

Proprietary Fund Types

Types of funds used by governmental entities to account for activities similar to those found in the private sector, where the intent is to recover costs through user charges.