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.

---

Definitions:

Stock Issuance Costs

Expenses incurred by a company while issuing new shares of stock, including legal, accounting, and underwriting fees.

New Shares

Additional shares issued by a company, either through public offering, private placement, or stock splits, increasing the total number of outstanding shares.

Fair Value Allocation

The process of assigning a fair market value to all assets and liabilities of a company, often conducted during the acquisition process.

Par Value

Par value is the nominal or face value of a bond, stock, or other financial instrument, as stated by the issuer.