Which of the Following Is the Major Difference Between the Accounting

question 67

Multiple Choice

Which of the following is the major difference between the accounting for equity securities and debt securities?

• A)Debt securities are classified as liabilities,while equity securities are classified as assets.
• B)Debt securities are classified as trading investments,while equity securities are classified as held-to-maturity investments.
• C)Debt securities earn interest revenue,while equity securities earn dividend revenue.
• D)Debt securities of all types have a maturity date,while only a few equity securities have a maturity date.

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Definitions:

Congress

The national legislative body of a country, particularly in the United States, consisting of the Senate and the House of Representatives.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulating banks, and ensuring financial stability.

Commercial Banks

Commercial banks are financial institutions that accept deposits, offer checking account services, and make loans to individuals and businesses.

Reserve Requirements

Regulations set by central banks determining the minimum amount of reserves that must be held by a commercial bank.