If You Were Considering the Purchase of a Bond Issued

question 57

Multiple Choice

If you were considering the purchase of a bond issued by a state,county,or city you would be considering the purchase of a ________ bond.

• A)state
• B)municipal
• C)government hedge
• D)corporate
• E)none of the above

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Definitions:

Discounts Lost

Charges incurred from not taking advantage of early payment discounts offered by suppliers.

Net Method

An accounting method for recording purchases where the purchase price includes a cash discount for early payment.

Periodic Inventory System

An accounting method where inventory is physically counted and valued at set intervals, affecting the cost of goods sold calculation.

Discounts Lost

Refers to the additional cost a company incurs for not taking advantage of the cash discounts offered by suppliers for early payments.