Business Management chapter 16 (14E)

Bonds that are based upon the faith and credit of the corporation that issues them are

The investment made in a business by its owners is called

. Long-term debt capital is obtained by

A supplier who allows a business 90 days to pay for merchandise is actually providing short-term capital.

Whencorporation ceases operation, preferred and common stockholders usually get all their investment back from asset sal

Bondholders must be paid before stockholders share in the earnings.

Retained earnings are kept in the business in the form of cash only.

If the par value of a share of stock is $100, the market value cannot be below $100.

The dollar value printed on the stock certificate is known as the

Short-term debt must be repaid to the lender with interest within

If a business has a $50,000 open line of credit, it can borrow a minimum of $50,000 at a time.  

The original cost of obtaining long-term capital is usually higher than that of short-term capital.

Equipment maintenance and insurance are usually included in a leasing agreement.

Sole proprietors must rely on their personal assets for capital if they want to retain ownership in the company.

Even if a business is not making a profit, it should plan to replace assets that depreciate.  

Which statement is true about trade credit?

When starting a business, it is usually desirable to issue only common stock.

Retained earnings are a type of equity capital.

If a sole proprietorship fails, which of the owner's assets may be lost?

Common stock is a type of security, but bonds are not.