Multiple Choice
An independent audit adds value to the communication of financial information because the audit:
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1. Introduction to Accounting
Types of Accounting
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Which of the following definitions best describes a serial bond?
A
A bond issue in which portions of the principal mature at regular intervals over a period of time.
B
A bond that matures in full on a single date in the future.
C
A bond that can be converted into shares of the issuing company's stock.
D
A bond that is secured by specific assets of the issuing company.
Verified step by step guidance1
Understand the concept of a serial bond: A serial bond is a type of bond where portions of the principal are scheduled to mature at regular intervals over a period of time, rather than all at once on a single maturity date.
Compare the definition of a serial bond with the other options provided in the question. For example, a bond that matures in full on a single date is known as a term bond, not a serial bond.
Evaluate the option describing a bond that can be converted into shares of the issuing company's stock. This is a convertible bond, which is different from a serial bond.
Consider the option describing a bond secured by specific assets of the issuing company. This is a secured bond, which is also distinct from a serial bond.
Select the option that matches the definition of a serial bond: A bond issue in which portions of the principal mature at regular intervals over a period of time.
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