Which of the following is the major difference between the accounting for equity securities and debt securities?

Question

Quizplus · Accepted Answer

The major difference between accounting for equity securities and debt securities is that debt securities earn interest revenue, while equity securities may earn dividend revenue. Debt securities are also classified according to their intended holding period and purpose, whereas equity securities are typically held for investment purposes with no specific maturity date. While choices A and B are partially true, they do not address the major difference between the two types of securities. Choice D is also incorrect as many equity securities, such as perpetual preferred stock, do not have a maturity date.

Which of the Following Is the Major Difference Between the Accounting