What is deference between bond and stock in accounting?
Question:
in stocks your money is not promised to you and the amount of money you recieve depends on the profit however with bonds you are assured that money with interest this is promised to you and does not depend on the companies status
A bond is a promise to pay note, or a loan essentially to whom ever the issuer is. They have a set rate of return, this varies but is often just higher than the current interest rates, to be paid out at a certain time, say in 3 years, but the interest accrues until it is paid.
A stock is volitale and promises no return on your investment, or you could lose money. However, if you plan to hold the stock long term, you will probably make more money long term with a stock. (A stock is an investment in a company, not a loan to them)
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