Which of the Following Statements About Bonds and Notes Is

question 61

Multiple Choice

Which of the following statements about bonds and notes is not correct?

• A)A company can borrow the funds necessary to finance its activities using bonds or promissory notes.
• B)Borrowings using bonds or notes are initially recorded with a journal entry that debits Cash and credits the relevant liability account.
• C)The journal entry that records interest owed on bonds and notes includes a debit to Interest Expense and a credit to Interest Payable.
• D)Bonds Payable and Notes Payable are always classified as noncurrent liability accounts.

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Definitions:

All Men Are Created Equal

A principle found in the U.S. Declaration of Independence asserting the inherent and equal rights of all individuals.

Articles of Confederation

The original constitution of the 13 American states, ratified in 1781, which was replaced by the U.S. Constitution in 1789 because it provided limited federal power.

Presiding Officer

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Congress

The United States' national legislative entity, comprised of the Senate and the House of Representatives.