When Bonds Are Issued by a Company,the Accounting Entry Shows

question 66

Multiple Choice

When bonds are issued by a company,the accounting entry shows an

• A)increase in liabilities and a decrease in stockholders' equity.
• B)increase in liabilities and an increase in stockholders' equity.
• C)increase in assets and an increase in liabilities.
• D)increase in assets and an increase in stockholders' equity.

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Definitions:

Normative Theories

Theories that prescribe how things should be or how decisions should be made, often applied in ethics, economics, and law.

Positive Accounting Theory

An accounting theory that seeks to explain and predict accounting practices, focusing on the relationships between various parties involved in accounting.

Political Contracts

Agreements made in the context of political relations, often involving government entities, which can encompass a wide range of subject matter from trade to defense.

Managerial Contracts

Agreements outlining the terms and responsibilities between managers and the entity they manage, often including performance criteria, duties, and compensation.