Which Statement Is Correct About Debt Instruments

question 123

Multiple Choice

Which statement is correct about debt instruments?

• A)A contract whose value changes according to a specified variable.
• B)A contract that gives the holder the residual interest in an entity.
• C)A contract that gives the holder joint interest in an entity.
• D)A contract that is not an equity instrument or a derivative.

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Definitions:

Stockholders' Equity

Stockholders' Equity is the residual interest in the assets of a corporation after deducting liabilities, representing ownership equity spread amongst shareholders.

EPS Reporting

The process of disclosing earnings per share, a key financial ratio indicating the portion of a company's profit allocated to each outstanding share of common stock.

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and practices used in the United States to ensure financial statements are consistent and transparent.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) that serve as a global framework for financial reporting.