If a Company Has a Profit

question 25

Multiple Choice

If a company has a profit:

• A) Assets will be equal to liabilities plus equity.
• B) Assets will be less than liabilities plus equity.
• C) Assets will be greater than liabilities plus equity.
• D) Equity will be greater than its assets.

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Definitions:

Debt Instruments

Financial contracts obligating the borrower to pay back the lender, including bonds, notes, and mortgages.

One Year

A period of time consisting of 12 months or 365 days, commonly used as a basis for calculating interest, returns, and performance metrics.

Issuing Securities

The process by which a corporation offers new stocks or bonds to the public or existing shareholders or bondholders.

Secondary Market

The financial market where investors purchase and sell securities they already own, as opposed to the primary market where securities are first issued.