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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

14. Financial Statement Analysis

Ratios: Earnings Per Share (EPS)

Financial Accounting

14. Financial Statement Analysis

Ratios: Earnings Per Share (EPS)

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Multiple Choice

Which one of the following statements correctly distinguishes between bonds and stocks?

Stocks have a fixed maturity date, while bonds do not.

Bonds represent a company's debt, while stocks represent ownership in the company.

Interest payments on bonds are optional, while dividends on stocks are mandatory.

Bonds give holders voting rights in the company, while stocks do not.

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Verified step by step guidance

Understand the fundamental difference between bonds and stocks: Bonds are debt instruments issued by a company or government to raise funds, while stocks represent ownership in a company.

Recognize that bonds typically have a fixed maturity date, meaning the issuer must repay the principal amount at a specified future date, whereas stocks do not have a maturity date.

Note that interest payments on bonds are contractual obligations and must be paid as agreed, while dividends on stocks are discretionary and depend on the company's decision to distribute profits.

Understand that stockholders often have voting rights in the company, allowing them to participate in decisions like electing the board of directors, while bondholders do not have voting rights.

Conclude that the correct distinction is: Bonds represent a company's debt, while stocks represent ownership in the company.