As a Part of a Bond Issue, a Corporation Makes

question 12

Multiple Choice

As a part of a bond issue, a corporation makes annual payments into an account managed by a trustee for the purpose of repurchasing bonds. This arrangement is called:

• A) a call provision.
• B) a sinking fund.
• C) a funding provision.
• D) a trust maintenance fund.

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Definitions:

Contribution Format

A type of income statement where costs are divided into variable and fixed categories, enabling analysis of contribution margin.

Variable Expense Ratio

The ratio of variable costs to total sales, indicating how variable expenses change with sales levels.

Contribution Format

A way of presenting an income statement where variable costs are deducted from sales to show contribution margin before fixed costs are subtracted to show net operating income.

Income Statement

An income statement is a financial document that summarizes a company's revenues, expenses, and profits over a specific period, showing its financial performance.