Industrial Development Bonds Are Issued in the Name of a Government

question 4

Multiple Choice

Industrial development bonds are issued in the name of a government with the proceeds used to attract private businesses to a community. Which of the following is a true statement about industrial development bonds?

• A) The proceeds are used by the private corporations and principal and interest payments are made by the private corporation. The government backs the bonds in the event of default by the private corporation.
• B) The proceeds are used by the private corporations and principal and interest payments are made by the private corporation. The government does not back the bonds in the event of default by the private corporation.
• C) The proceeds are used by the government to build infrastructure to service private corporations, with principal and interest payments made by the government out of the additional tax revenues received from the private corporation.
• D) The proceeds are used by the government to build infrastructure to service private corporations, with principal and interest payments made by the private corporation in lieu of property taxes.

---

Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including materials and labor.

Product Costs

Costs that are directly associated with the manufacture of goods, including materials, labor, and manufacturing overhead.

Financial Reporting

Financial reporting involves the disclosure of financial results and related information to various stakeholders about a company's financial health and performance.

Merchandising Company

A business that purchases finished goods for resale to generate revenue, such as retailers.