The Fundamental Accounting Equation Is as Follows: Assets = Liabilities

question 128

True/False

The fundamental accounting equation is as follows: Assets = Liabilities + Owners' equity.

---

Definitions:

Convertible Bonds

Bonds issued by a corporation that can be converted into a predetermined number of shares of the company's stock.

Participating Preferred Stock

Preferred shares that offer the holder the advantage of receiving dividends equal to the common shares when the company performs well financially.

Mandatorily Redeemable

Describes financial instruments or securities that the issuer is obligated to buy back from holders at a predetermined date or upon the occurrence of certain events.

Preferred Stock

Preferred stock is a type of stock that affords its holders preferential payments of dividends or distributions, and often has priority over common stock in the event of a liquidation.