When a Firm Collects the Face Value of a Long-Term

question 56

Multiple Choice

When a firm collects the face value of a long-term investment in bonds at maturity:

• A)both assets and equity of the firm remains unchanged.
• B)both assets and liabilities of the firm increase.
• C)both assets and equity of the firm increase.
• D)liabilities decrease and equity increases.

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Definitions:

Retribution

A principle of justice where the punishment of wrongdoers is proportionate to the harm they have caused.

Incapacitation

A criminal justice philosophy aiming to prevent crime by detaining or restricting the movements of offenders to protect society.

Three-strikes

A legal principle mandating harsher sentences for repeat offenders, typically after three serious crimes.

Mandatory Minimum

A legal requirement that dictates the minimum sentence a judge must impose for a particular crime, reducing judicial discretion.