Which of the Following Is a Liability

question 12

Multiple Choice

Which of the following is a liability?

• A) Revenue received in advance
• B) Accrued revenue
• C) Prepayments
• D) None of the answers provided

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Definitions:

Interest-Rate Changes

Adjustments made by central financial authorities to the cost of borrowing money, which can influence economic activity and financial markets.

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) periodically until the maturity date, at which time the principal is repaid.

Yield to Maturity

The total return anticipated on a bond if it is held until the date it matures, calculated by considering all future coupon payments and the principal repayment.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, often described as the weighted average time until all cash flows are paid.