All of the Following Items Would Need to Be Included

question 21

Multiple Choice

All of the following items would need to be included in the bond's indenture agreement EXCEPT

• A) the coupon rate.
• B) the call feature.
• C) the credit rating.
• D) steps that the bondholder can take in the event that the issuer fails to pay the interest or principal.

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Definitions:

Current Asset

Assets expected to be converted into cash, sold, or consumed within one year or the normal operating cycle of a business, whichever is longer.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from the company's operations is used, as opposed to the indirect method which adjusts net income for accruals.

Accrued Interest

Interest that has been incurred but not yet paid or received at the end of the accounting period.

Maturity Date

The specified date on which the principal amount of a loan, bond, or other financial instrument is due to be paid in full.