accounting 251

debit financing equity financing

what are the two types of financing

long-term

Bonds and leases are normally classified as ______ liabilities.

debt

In order to expand its business, Mueller Inc. is borrowing $1 million from its bank. Mueller is utilizing this type of financing:

Improvement in cash flows Lower periodic payments on the asset Protection against declining asset value

Which of the following are possible benefits of leasing an asset rather than purchasing an asset?

Protection against declining asset value Improvement in cash flows Lower periodic payments on the asset

Which of the following are possible benefits of leasing an asset rather than purchasing an asset?

debt

________ financing refers to borrowing money from creditors.

interest on debt is tax deductible.

Debt is considered a lower cost method of financing than equity because

interest is tax deductible

An advantage to financing with debt is that

the mixture of debt and equity used to finance the company.

A company's capital structure refers to

a portion that reflects interest. a portion that reduces the outstanding loan balance.

Periodic payments on installment notes typically include (Select all that apply.)

Notes payable Leases Bonds

Which of the following are methods of long-term financing with debt?

bonds.

A corporation that wishes to borrow from the general public rather than a bank will issue

Equity

In order to expand its business, Mueller Inc. is selling $10 million in common stock. Mueller is utilizing this type of financing: