A USCompany Issues Bonds to Generate Money for Expanding Its Business

question 86

Multiple Choice

A U.S.company issues bonds to generate money for expanding its business to China.The company generates a sum of $50,000 in this fashion.This money is an example of a(n) ________.

• A) short-term finance
• B) long-term liability
• C) owners' equity
• D) accrued expense
• E) payable account

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales volume, such as rent and salaries.

Variable Expenses

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Total Contribution Margin

The difference between total sales revenue and total variable costs, representing the amount available to cover fixed expenses and generate profit.