Which of the Following Is a TRUE Statement Regarding Expenses

question 208

Multiple Choice

Which of the following is a TRUE statement regarding expenses?

• A)Expenses represent future benefit to the company.
• B)The expense recognition principle recognizes expenses in the same period in which the related revenues are earned.
• C)Expenses will never result in the creation of a liability account.
• D)The critical event for recording salary expense is the payment of cash.

---

Definitions:

Coupon Bond

A type of bond that pays the holder a fixed interest rate (coupon) over its lifetime, and the principal amount is repaid at maturity.

Yield To Maturity

Yield to Maturity (YTM) is the total anticipated return on a bond if the bond is held until it matures, accounting for interest payments and principal repayment.

Par Value

Par value is the face value of a bond or the stock value stated in the corporate charter, which signifies the minimum price that the securities can be issued for.

Coupon Rate

The interest rate on a bond, expressed as a percentage of the bond's face value, paid by the bond issuer to the bondholder.