All of the Following Are Types of Innovative Bonds Except

question 126

Multiple Choice

All of the following are types of innovative bonds except:

• A) preferred stock.
• B) asset-backed bonds.
• C) reverse floaters.
• D) indexed bonds.

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Definitions:

Promissory Note

A formal written promise by a borrower to pay a certain sum at a fixed future date.

Notes Payable

Short-term or long-term liabilities recorded when a company borrows money, often in the form of a formal written agreement to pay a specified amount with interest.

Net Method

The net method accounts for purchase discounts by recording the initial purchase at net of the discount, encouraging prompt payment by recognizing discounts not taken as interest expense.

Periodic Inventory Method

An accounting method that updates inventory levels and cost of goods sold at the end of a financial period rather than after each sale.