Which of the Following Statements About the Characteristics of Debt

question 42

Multiple Choice

Which of the following statements about the characteristics of debt and equities is TRUE?

• A)They can both be long-term financial instruments.
• B)Bond holders are residual claimants.
• C)The income from bonds is typically more variable than that from equities.
• D)Bonds pay dividends.

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Definitions:

Petty Cash Fund

A petty cash fund is a small amount of cash on hand used for paying expenses too small to merit writing a check.

Cash Short

A situation where the actual cash on hand is less than the expected amount, usually identified during cash reconciliation.

Journal Entry

An entry made in a journal that records a specific financial transaction, including amounts, accounts affected, and a description.

Control Procedures

These are policies and practices that organizations put in place to ensure the integrity of their financial and accounting information and to prevent fraud.