A Disadvantage of Bonds Is

question 135

Multiple Choice

A disadvantage of bonds is:

• A) Bonds require payment of periodic interest.
• B) Bonds require payment of par value at maturity.
• C) Bonds can decrease return on equity.
• D) Bond payments can be burdensome when income and cash flow are low.
• E) All of these.

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Definitions:

Reporting Period

The specific timeframe for which financial statements are prepared, showing the financial position and performance of a company.

Financial Statements

Documents that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Post-closing Trial Balance

A list of all balances in a company’s ledger accounts after the closing entries are made, serving as a check to ensure debits and credits are balanced at the end of an accounting period.

Operating Cycle

The time it takes for a company to purchase inventory, sell products, and collect cash from customers.