Which of the Following Definitions Describes a Term Bond

question 129

Multiple Choice

Which of the following definitions describes a term bond?

• A)Matures on a single date.
• B)Secured only by the "full faith and credit" of the issuing corporation.
• C)Matures in installments.
• D)Supported by specific assets pledged as collateral by the issuer.

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Definitions:

Operating Earnings

Operating earnings refer to the profit a company makes from its normal business operations, excluding non-operating income and expenses.

Depreciation Expense

An accounting method of allocating the cost of a tangible or physical asset over its useful life to account for declines in value.

Half-Year Convention

The half-year convention is a method in depreciation accounting where an asset is assumed to have been in service for half the year, regardless of when it was actually acquired during the fiscal year.

Incremental Depreciation

The additional depreciation expense recorded when there is a change in the estimated useful life or salvage value of an asset.