An Individual Who Acquires a Bond from a Corporation

question 86

Multiple Choice

An individual who acquires a bond from a corporation

• A)lends money to the corporation.
• B)borrows money from the corporation.
• C)buys part of the corporation.
• D)promises to pay part of any debts of the corporation.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, where the investment's value is adjusted for profits, losses, and dividends.

Unamortized Acquisition Differential

The portion of the purchase price that is not yet allocated and remains unamortized on the balance sheet after an acquisition.

Goodwill Impairment

A charge that occurs when the fair value of goodwill drops below its recorded cost on the balance sheet, indicating a reduction in the value of acquired assets.

Mark-Up

A sum added to the purchasing price of products to account for overhead expenses and earnings.