The Text Classifies Accounts Receivables into Several Broad Types

question 19

Multiple Choice

The text classifies accounts receivables into several broad types. What are they?

• A) Accounts receivable, bills receivable, other receivables
• B) Debtors, accounts receivables, promissory notes
• C) Trade debtors, other debtors, sundry debtors
• D) Promissory notes, accounts receivable, prepayments

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Definitions:

Market Conversion Value

The current market value of a convertible security if it were converted into the underlying shares of stock today.

Conversion Ratio

The conversion ratio is the number of shares an investor receives when converting a convertible security, such as a convertible bond or preferred stock, into common stock.

Bond Indenture

A legal contract detailing the terms and conditions under which a bond is issued, including the obligations of the issuer and the rights of the bondholders.

Sinking Fund

A sinking fund is a method by which a company sets aside money over time to retire its preferred stock, bonds, or debentures before or at maturity, to ensure investment security for bondholders.