A Financial Liability Is a

question 33

Multiple Choice

A financial liability is a

• A)contractual obligation to receive cash in the future.
• B)contractual obligation to pay cash in the future.
• C)contractual obligation to issue common shares in the future.
• D)contractual obligation to issue a mortgage payable.

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Definitions:

Callable Unsecured Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified call price and are not secured by collateral.

Subordinated Debentures

Bonds that have a lower priority than other debt obligations in case of liquidation, often carrying higher risk and yield.

Bonds

Fixed income investments where an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period at an interest rate.

Promissory Notes

Written promises to pay a specified sum of money to a certain entity on demand or at a defined future time.