Sinking Fund Bonds

question 105

Multiple Choice

Sinking fund bonds:

• A) Require the issuer to set aside assets to retire the bonds at maturity.
• B) Require equal payments of both principal and interest over the life of the bond issue.
• C) Decline in value over time.
• D) Are registered bonds.
• E) Are bearer bonds.

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Definitions:

Fiscal Year

A twelve-month period used for accounting purposes and preparation of financial statements, which may not align with the calendar year.

Withdrawals

The act of taking out cash or other assets from a business by the owner for personal use.

Investments

Financial assets purchased with the expectation they will generate income or appreciate in the future.

Balance Sheet

The balance sheet is a financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.