Which of the Following Is Not a Reason for the Issuance

question 30

Multiple Choice

Which of the following is not a reason for the issuance of long-term liabilities?

• A) Debt financing offers an income tax advantage.
• B) Debt financing dilutes ownership interest.
• C) Debt may be the only available source of funds.
• D) Debt financing may have a lower cost.

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Definitions:

Journalize Transactions

The process of recording financial transactions in a company's journal, marking the first step in the accounting cycle.

Credit Card Sales

Transactions where customers purchase goods or services using a credit card as the payment method.

Service Charge Fee

A fee charged by a bank or financial institution for processing transactions or providing a specific service.

Finance Charges

The cost of borrowing money, including interest and other fees.