Explain how purchase commitments are recorded for the lower of contract price or market price.

Q: The contract rate is above the market rate. The contract rate is equal to the market rate.

A: The correct answer is option (a) The contract rate is above the market rate.

Q: Differentiate between price risk and reinvestment risk.

A: Price risk is the risk of decline of the price of the investment or an asset after the underlying…

Q: What document is the difference between a primary and a secondary market?

A: Primary Market: The primary market is where new securities are formed, while the secondary market is…

Q: Under what conditions is a market-based transfer price most likely to be used?

A: Transfer Pricing: It is termed as the cost which is charged by the one department of the company…

Q: Allocate a contract’s transaction price to multiple performance obligations.

A:

Q: What is a sale-and-leaseback transaction?

A: Sale and leaseback is a deal in which the owner of an asset trades an asset, typically real estate,…

Q: What is the concept of sale-leaseback agreement?

A:

Q: What are the differences between market ordersand limit orders?

A: Market orders might not be executed external of market times or if trading in a specific stock is…

Q: Explain the effect of issuance cost on firm value.

A: There are issues cost associated with debt and equity that has impact on  value of firm.

Q: state the limitations of the payback pe

A: Answer : The payback period is the quantity of time needed for cash inflows generated by a project…

Q: Explain the difference between the forward price and the value of a forward contract. Give an…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: List price × trade discount rate = amount of trade discount. true or false

A: The question is related to true or false.

Q: State the difference between secondary market and primary market.

A: Financial Markets refer to the place where financial assets or securities are being created,…

Q: (Based on Appendix 9) Explain how purchase commitments are recorded for the lower of contract price…

A:

Q: Describe the accounting for the fair value option.

A: The fair value option allows the business to record its assets and liabilities at their fair value.…

Q: what is fixed-price contract, and what are the benfit of chosing it

A: A contract where the price is fixed as negotiated by the parties is known as a Fixed Price Contract.…

Q: What is the transaction price? What additional factorsrelated to the transaction price must be…

A: The transaction price is an amount that is received by the company from the transfer of goods or…

Q: In general terms, how would a change ininvestment opportunities affect the payoutratio under the…

A: Answer: In the residual dividend policy, the distribution is calculated after the company’s spending…

Q: Discuss the assumptions, approach, estimation, benefits, limitations, and criticisms of Arbitrage…

A: Arbitrage Pricing Theory is a multi-factor pricing model. Arbitrage Pricing Theory can be used to…

Q: Define Trade discounts.

A: Business:   It refers to a commercial activity involving buying and selling of a product or a…

Q: Discuss the difference between: A. Contract of Sale and Contract to Sell B. Sale by Sample, Sale by…

A: Contract of Sale and Contract to sell the contract of sale, the exchange of goods takes place…

Q: give the definition, recognition, measurement and derecognition of "borrowing cost"

A: A uniform group of principles, standards, and procedures that explain the basic financial accounting…

Q: What are the types of agreement related to sale-leaseback agreement?

A: Sale and Leaseback Agreement is a kind of financial transaction. This is a situation that arises…

Q: Discuss the following models in relation to purchasing power parity.

A: Comparative rates of inflation in different countries are the factors influencing the exchange rate.…

Q: What is the quantitative disclosure of lessor?

A: Definition: Lease: Lease is a contractual agreement whereby the right to use an asset for a…

Q: standard setters?

A: Earnings management for contracting causes would be an interest in standard setters because of the…

Q: Explain Pass-Through Rates, Yields, and Servicing Fee?

A: Pass-through rateA rate of interest being paid to the investors on the securitized asset after…

Q: The Contract rate is also known as the coupon or stated rate that is identified in the indenture…

A:

Q: Explain how both the intrinsic value and the time value are measured for a forward contract to sell…

A: SOLUTION:- An option ,represents the right rather than an obligation to buy or sell the security.…

Q: When is a forward contract preferred over an option contract ?

A: Forward contract and Option contract Option contract gives the right to the holder to buy or sell…

Q: What is mark-to-market?

A: Market to market is an equipment that can become different the value on either side of balance…

Q: Is the “forward price” the same thing as the “value of the forward contract” Explain.

A: Derivative is defined as the contract, which are between the two or more parties, who has the value…

Q: What is meant by a term-loan agreement?

A: A Loan Agreement, also known as a term loan, demand loan, or loan contract. It basically is a legal…

Q: The contractual interest rate is alway state as a

A: Contractual Interest Rate Contractual interest rate refer as the rate which helps to determine the…

Q: Define purchase commitments. What is the advantage(s) of these agreements to buyers?

A: Purchase Commitments refer to the commitments or contract made by a company with its suppliers to…

Q: Explain Effective Cost of the Sale-Leaseback?

A: Sales leaseback is a type of financial transaction where the owner sold its property to the other…

Q: Define sale-and-leaseback

A: sale-and-leaseback

Q: Who is an unpaid seller? Give an example using a situation/scenario.

A: A seller is someone who offers goods or services to the customers. Seller sells its goods or…

Q: Describe the conditions that would make the use of advance-discounts appropriate.

A: Discount means a selling of goods or service below the price of goods. This reduction in price is…

Q: What is an Option Contract?

A: An Option contract is an agreement between two parties to buy or sell an underlying asset, at a…

Q: . Which of the following may not be equal to the contract rate of interest? a. stated rate b.…

A: Contract rate of interest is the defined rate of interest on bonds, notes or loan.

Q: Define Purchase commitments.

A: Purchase Commitments refer to the commitments or contract made by a company with its suppliers to…

Q: Explain how to allocate the transaction price to each performance obligation.

A: If a customer receives a discount for acquiring a bundle of goods or services, the entity should…