A Standard Arrangement for the Orderly Retirement of Long-Term Debt

question 16

Multiple Choice

A standard arrangement for the orderly retirement of long-term debt calls for the corporation to make regular payments into a(n) :

• A) custodial account.
• B) sinking fund.
• C) retirement fund.
• D) irrevocable trustee fund.

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Definitions:

Financial Statements

Reports that summarize the financial performance and position of a company, including the balance sheet, income statement, and cash flow statement.

Trial Balance

A bookkeeping report that lists the balances of all ledgers and accounts to check that debits equal credits.

Adjusted Trial Balance

A trial balance prepared after all adjustments for accrued, deferred, and estimated items have been posted, showing the balances of all accounts that will be used to prepare the financial statements.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time.