Which of the Following Is a True Statement

question 75

Multiple Choice

Which of the following is a true statement?

• A)A corporation generally obtains equity capital from bondholders.
• B)A corporation must issue either preferred stock or common stock but not both.
• C)When a corporation is experiencing financial problems,an investor should purchase common rather than preferred stock.
• D)Most corporations sell options to satisfy a large part of their financing needs.
• E)A stock split may not cause a stock's value to increasE.

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Definitions:

Merchandise Inventory

Goods that a company holds for the purpose of selling them to customers, reported as a current asset on the balance sheet.

Bank Service Charge

Fees charged by a bank for the maintenance of an account and for providing banking services.

Book Balance

The balance of an account according to the accounting records, not necessarily reflecting available funds or amounts for spending.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those shown on a bank statement to identify any discrepancies.