The Long-Term Debts of a Firm Are Liabilities

question 75

Multiple Choice

The long-term debts of a firm are liabilities:

• A)owed to the firm's shareholders.
• B)the firm expects to incur within the next 12 months.
• C)owed to the firm's suppliers.
• D)that come due within the next 12 months.
• E)that do not come due for at least 12 months.

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Definitions:

Net Income

The financial profit a company has after subtracting all its expenses from its total revenue, indicating its profitability over a specified period.

Goodwill

An intangible asset representing the value of a company's brand name, solid customer base, good customer relations, good employee relations, and any patents or proprietary technology.

Legal Entity

A legally constituted organization that has the authority to enter into contracts, sue and be sued, and own assets separately from its owners or members.

Consolidation

The act of merging multiple entities into one, often to streamline operations and reduce costs, or in financial terms, combining financial statements of parent and subsidiary companies.