Which of the Following Statements Is True

question 57

Multiple Choice

Which of the following statements is True?

• A) Interest on bonds is tax deductible.
• B) Interest on bonds is not tax deductible.
• C) Dividends to stockholders are tax deductible.
• D) Bonds do not have to be repaid.
• E) Bonds always increase return on equity.

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Definitions:

Statement of Comprehensive Income

A financial statement that shows all the items of income and expense recognized in a period including items beyond those in profit or loss.

Profit

The financial gain realized when the revenues generated from business activities exceed the expenses and costs associated with operating the business.

Unrealised Profit

Profits that have been earned but not yet realized through a transaction, such as an increase in the value of an investment that has not been sold.

Partial Goodwill Method

A method of accounting for a business combination where goodwill is only recorded in relation to the parent's share of ownership in the subsidiary.