Table of contents

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

11. Long Term Liabilities

Introduction to Bonds and Bond Characteristics

Financial Accounting

11. Long Term Liabilities

Introduction to Bonds and Bond Characteristics

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes a bond?

A share of ownership in a corporation that entitles the holder to a portion of the company's profits.

A long-term debt instrument issued by a corporation or government to raise capital, promising to pay periodic interest and repay the principal at maturity.

A contract that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price within a certain period.

A short-term financial instrument used for daily cash management, typically maturing in less than one year.

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the concept of a bond. A bond is a long-term debt instrument issued by corporations or governments to raise capital. It involves a promise to pay periodic interest (coupon payments) and repay the principal amount (face value) at maturity.

Step 2: Compare the given options to the definition of a bond. Analyze each option to determine which one aligns with the characteristics of a bond.

Step 3: Option A describes a share of ownership in a corporation, which is not a bond but rather equity. Bonds do not represent ownership; they represent debt.

Step 4: Option C describes a contract for buying or selling an asset at a specified price, which is a derivative instrument known as an option, not a bond.

Step 5: Option D describes a short-term financial instrument, which is typically a money market instrument like a Treasury bill, not a bond. Therefore, the correct answer is the description of a bond as a long-term debt instrument issued to raise capital.