Which of the Following Statements Regarding Bonds Is True

question 2

Multiple Choice

Which of the following statements regarding bonds is true?

• A) Bonds are liabilities of the issuer.
• B) Individuals investing in bonds receive dividends.
• C) Bonds cannot be purchased or sold prior to maturity.
• D) Income from bonds varies every year.
• E) The principal invested in bonds is not returned at the time of maturity.

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Definitions:

Income Tax Expense

The amount of money that a company owes to the government for income earned during a fiscal period.

Accounts Payable Turnover Ratio

A liquidity metric that measures the rate at which a company pays off its suppliers by comparing net credit purchases to average accounts payable.

Working Capital

The disparity between an organization's immediate assets and liabilities, showcasing its short-term economic viability and effectiveness.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the operating cycle of a business.