Rights or Claims Against Resources by Creditors Are

question 5

Multiple Choice

Rights or claims against resources by creditors are

• A) assets.
• B) liabilities.
• C) owner's equity.
• D) transactions.

Differentiate between par value and market value of bonds.

Grasp the concepts of present value and how they apply to financial decisions.

Recognize the various types of bonds and their backing securities.

Compare bonds and long-term notes in terms of their dealings with lenders.

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Definitions:

Indirect Method

A way of preparing the cash flow statement, where net income is adjusted for non-cash transactions and changes in working capital.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or wear and tear.

Accounts Receivable

Outstanding payments from customers for goods or services rendered by a company which have not been settled yet.

Direct Method

A way of preparing the cash flow statement where actual cash inflows and outflows from operating activities are reported, as opposed to the indirect method.