The Payment of Salaries to Employees When Earned Would

question 35

Multiple Choice

The payment of salaries to employees when earned would:

• A) increase assets
• B) increase net income
• C) increase liabilities
• D) decrease shareholders' equity

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Definitions:

Yield to Maturity

The total return anticipated on a bond if the bond is held until it matures, incorporating both interest payments received and any gain or loss if the bond is bought at a discount or premium to its face value.

Zero-coupon Bond

A type of bond that does not pay interest during its life but is sold at a discount and matures at its face value.

Maturity

The date on which the principal amount of a loan, bond, or other financial instrument becomes due and payable.

Arbitrage

The practice of buying and selling equivalent assets in different markets to take advantage of a price difference.