Questions
Questions

MCD2170 - T2 - 2025 Pre-class Quiz Week 6

Single choice

________ is a contractual obligation to pay back the amount that has been borrowed. The borrower owes principal and interest to the lender. Whereas_____ provides ownership of the company to the shareholders.

Options
A.a. Share equity; asset
B.b. Loan; liability
C.c. Liability; asset
D.d. Debt; share equity
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Step-by-Step Analysis
The question presents two blanks to be filled: the first describes an obligation to repay borrowed money, and the second describes ownership of the company by shareholders. Option a: 'Share equity; asset' would imply the first blank is ownership (share equity) and the second blank is something representing an asset. This reverses the intended meaning, because the obligation ......Login to view full explanation

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