Which of the Following Best Explains 'Performance Bond

question 2

Multiple Choice

Which of the following best explains 'performance bond'? 

• A) Written guarantee from a third-party guarantor. 
• B) Guarantee issued by the bank of the supplier. 
• C) Holding company secures payment for agreed sum in case business unit fails to make payments. 
• D) Business unit guarantees to pay holding company.

---

Definitions:

Prepayment Accounts

Accounts used to record expenses that have been paid in advance and are recognized incrementally as expenses over time.

Balance Sheet

A financial statement that displays a company's financial position at a specific point in time, including assets, liabilities, and shareholders' equity.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, leading to its net income or loss.

Accrued Revenues

Revenues that have been earned but not yet received in cash or recorded, representing assets on the balance sheet.