Which of the Following Is Not an Advantage of Issuing

question 190

Multiple Choice

Which of the following is not an advantage of issuing bonds instead of common stock?

• A) Stockholder control is not affected.
• B) Earnings per share on common stock may be lower.
• C) Income to common stockholders may increase.
• D) Tax savings result.

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Definitions:

Purchase Returns

Goods returned by the buyer to the supplier usually due to defects or quality issues, sometimes leading to a refund or credit.

Sales Salary Expense

The total amount of salary and wages paid to employees involved in the sales process, reflected as an expense on the income statement.

Departmental Gross Profit

The gross profit of a specific department within a store or company, calculated by subtracting the cost of goods sold in that department from its sales revenue.

Assets

Properties (resources) of value owned by a business (cash, supplies, equipment, land).