A Bond Is

question 12

Multiple Choice

A bond is:

• A) share of ownership in a company.
• B) a promise to pay interest each year and to repay the principal on a specified date.
• C) a liquid asset since it is a standardized product with a market in which the owner can sell it.
• D) both a promise to pay interest each year and to repay the principal on a specified date and a liquid asset since it is a standardized product with a market in which the owner can sell it.

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Definitions:

Consolidated Net Income

The total net income of a parent company and its subsidiaries, after adjusting for intercompany transactions, reported as a single figure.

Equity Method

An accounting technique used when a company has significant influence over another company it invests in, typically reflected by owning 20% to 50% of the voting stock, where the investment is initially recorded at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets.

Reported Loss

Financial results showing that a company's expenses exceeded its revenues during a specific period, leading to a negative net income.

Internal Accounting Records

A collection of documents and ledgers used by a business to track financial transactions, assets, liabilities, and equity.