How Are the Differing Claims of Creditors and Investors Recognized

question 100

Multiple Choice

How are the differing claims of creditors and investors recognized by a corporation?

• A) The claims of creditors are liabilities; those of investors are assets.
• B) The claims of both creditors and investors are liabilities, but only the claims of investors are long term.
• C) The claims of creditors are liabilities; the claims of investors are recorded as shareholders' equity.
• D) The claims of creditors and investors are essentially equivalent.

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