Which of the Following Is True of the Comparison Between

question 62

Multiple Choice

Which of the following is true of the comparison between equity securities and debt securities?

• A)Debt securities represent stock ownership in a company whereas equity securities represent a credit relationship with the company.
• B)Equity securities earn dividend revenue whereas debt securities earn interest revenue.
• C)Neither debt securities nor equity securities mature at a stated date.
• D)Both debt securities and equity securities pay interest.

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Definitions:

Asset

Resources owned by a company or individual that are expected to bring future economic benefits.

Liability

A financial obligation of a business that it is required to repay in the future.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing what the owners own outright in the company.

International Standards

Guidelines and specifications established to ensure consistency and quality in products, services, and processes worldwide.