Which statement is true? * General borrowings may earn investment income deductible against general borrowing cost Capitalizable general borrowing cost is the total interest of all general borrowing costs Capitalizable general borrowing cost is the actual interest of all general borrowings less any investment income None of the above

Q: eates additional expense without enough benefit through codt savings, income or capital gain, them…

A: Companies use debt in the capital structure because interest on debt is tax deductible and reduces…

Q: Which of the following is not a primary function of Money? a. All the options are correct b.…

A: Money is any item or verifiable record that is generally accepted as payment for goods and services

Q: Repurchase agreement is a collaterized borrowing. Is this true or false? Why?

A: Repurchase agreement is a collateralized borrowing because in this type of agreement the lender…

Q: If debt creates additional expense without enough benefit through cost savings, income or capital…

A: We know that Debt is the cheaper source of finance, because in income tax interest on debts is…

Q: Statement 1: When the residual value is guaranteed by the lessee, the lessor shall include the same…

A: As per IFRS 16, Leases A Gross investment in the lease is  = lease payments receivable by lessor in…

Q: 7. Which of the following is not one of the factors impacting the borrowing rate of repo assets? OA…

A: The factor that is not one of the factors impacting the borrowing rate of repo assets is:D.…

Q: Explain how to account for the impairment of an available-for-sale debt investment.

A: Debt Investment:   A debt investment involves loaning out the money to an institution in exchange…

Q: An investment with a cost of capital higher than its internal rate of return should be accepted.…

A: Internal rate of return is also known as IRR. It is a capital budgeting techniques which help in…

Q: If Valuation Allowance for Available-for-Sale Investments has a credit balance, how is it treated on…

A: Available-for-sales securities: These are short-term or long-term investments in debt and equity…

Q: Debt investments with an objective of collecting contractual cash flows is classified as: Group of…

A: Debt investments are those instruments which have a specified time period and interest is paid by…

Q: For statement profit and loss why the loan doesn't include in that statement

A: A follow-up question about loan amount   Loan is the money which has been borrowed by the company…

Q: 5. Which of the following incorrectly matches the classification of the debt investment with its…

A: The amortized cost means the accumulated portion of fixed asset expense or depreciation. One of the…

Q: Interest revenue for debt investments at fair value through other comprehensive income

A: IFRS 9 - Financial instruments deals with the calculation of interest income on debt investments.

Q: Debt also can be an advantage. How can be a debt can be advantage?

A: Debt Financing:   It is the money borrowed by the business from outside sources. This source of…

Q: ch of the following loan types has a beginning loan balance equal to the ending loan balance? Group…

A: Loans are kind of debt and burden and that carry the interest to be paid but when interest is to be…

Q: What is the arrangement that an SMSF must use for borrowing?

A: Self Managed Super funds (SMSF) are the superannuation trusts. These trust provides benefits to the…

Q: , How is the ability-to-pay principle (c) different from the benefit principle? Briefly discuss the…

A: Introduction:-  Ability to pay—A tax fairness idea that asserts that persons with various levels of…

Q: Explain or illustrate before-tax cost of debt and after-tax cost of debt.

A: In finance the cost of debt is the effective rate that a company pays on its debt. A company can…

Q: Explain Effective Cost of Two or More Loans?

A: When there is the existence of a situation, where the borrower takes an option to finance the…

Q: Transaction costs incurred the effective interest rate to be used for amortization of an investment…

A: Costs incurred during buying and selling any good or a service are generally referred to as…

Q: 1. Which is correct concerning capitalization of borrowing cost? If the borrowing is directly…

A: Introduction:- Borrowing costs are capitalized as a part of the cost of the qualifying asset only…

Q: Assuming interest costs related to an asset qualify for interest capitalization, which of the…

A: Option 4 is correct The amount that should be capitalised is the lower of actual interest cost…

Q: Why do we use an after-tax figure for cost of debt but not for cost of equity?

A: Cost of debt is the interest payments a company needs to make for debt financing, whereas cost of…

Q: It is the fractional part of the capital or sum invested that is paid for the loan or investment.…

A: 1. The rate of interest is some predecided percentage that is charged on the loan amount or provided…

Q: Evaluate in terms of the framework, why it is appropriate to capitalize borrowing costs under…

A: Borrowing prices are interest-associated alternative costs that an entity incurs in reference to…

Q: sources of financing through LO

A: Long term debt is a non current liability that is liable to be paid after one or more years.

Q: The interest rate is the IRR for the mixed investment. True or false?

A: Project Balance (PB) is the amount of investment that is made into a project at any given period of…

Q: type of liabilities: Trade and other payables  defination ?…

A: Current liabilities In accounting, current liabilities are often classified as all liabilities of…

Q: Following IFRS, which statement is false? Group of answer choices The revaluation surplus account…

A: The objective of the question is to identify the false statement among the given options related to…

Q: All things considered stable cash flows enable higher debt borrowing.

A: Cashflows: These are movement of the money from various sources like operations, investment…

Q: The capitalization rate used to determine the capitalizable borrowing cost should be disclosed.…

A: It is pertinent to note that as per IAS 23 borrowing costs incurred for acquisition, construction of…

Q: Evaluate in terms of the framework, why it is appropriate to capitalize borrowing costs under…

A: As per IAS 23 Borrowing Costs, borrowing costs directly attributable to the acquisition,…

Q: Evaluate in terms of the framework, why it is appropriate to capitalize borrowing costs under…

A: The accounting treatment of borrowing costs is governed by IFRS 9 Financial Instruments, which came…

Q: Distinguish between hard and soft capital rationing

A: Capital rationing is allocating a given amount among the most profitable projects which can maximize…

Q: how FHA buydown loans are structured?

A: Buydown loan is a type of loan in which lower interest rate is charged to the buyer. In such type…

Q: Solve the problem

A:

Q: With a treasury bill, the amortization of the discount is O more than interest revenue. O equal to…

A: T-billsare short-term debt securities issued by governments to raise funds. They are considered one…

Q: Which one is measurable debt burden? Select one: a. Varaiances b. Debt per capita c. None of the…

A: The correct option is   b. Debt per capita

Q: Why are claims on income discretionary with equityfinancing but nondiscretionary with debt…

A: Liability: In monetary bookkeeping, a liability is characterized as the future penances of financial…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.