Multiple Choice
Which type of accounting would you develop to understand the effect on the business of a risk being realized?
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1. Introduction to Accounting
Types of Accounting
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is an example of a financial asset?
A
Factory building
B
Corporate bond
C
Machinery
D
Land
Verified step by step guidance1
Understand the definition of a financial asset: A financial asset is an intangible asset that derives its value from a contractual claim, such as stocks, bonds, or bank deposits.
Review the options provided in the problem: Factory building, Corporate bond, Machinery, and Land.
Identify which of these options represents a financial asset. Physical assets like factory buildings, machinery, and land are tangible assets, not financial assets.
Recognize that a corporate bond is a financial asset because it represents a contractual claim to future cash flows (interest payments and principal repayment).
Conclude that the correct answer is Corporate bond, as it fits the definition of a financial asset.
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