Loans and receivable should be measured subsequent to initial recognition at * a. Amortized cost using the straight line method b. Fair value c. Fair value plus transaction cost d. Amortized cost using the effective interest method

Loans and receivable should be measured subsequent to initial recognition at * a. Amortized cost using the straight line method b. Fair value c. Fair value plus transaction cost d. Amortized cost using the effective interest method

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 15QTD

See similar textbooks

Related questions

Q: receivables not measured initially at their transaction price are measured initially at a. fair…

A: Financial Asset or Receivables: The financial Asset or Receivables is measured initially at fair…

Q: Describe the repayment process for both a term loan and ab

A: Term loan and bonds are two different types of raising money.

Q: Effective interest amortization method uses which of the following rates to determine interest…

A: Under the effective interest method, the interest is calculated as yield to maturity multiplied by…

Q: The payment for the use of borrowed money is called: loan maturity value interest principal

A: Borrowed money is the loan taken, which is to be repaid within the terms of the loan contract.

Q: For assets acquired on credit or by installment, the cost or fair value is equal to: A. cash…

A: The fixed assets are the assets acquired by the business to use for long run.

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: a) Explain the difference between: Capital expenditure and revenue expenditure, giving an example…

A: Capital Expenditure: It is a expenditure made by company to acquire or renovate a property, plant or…

Q: Identify the types of information that can readily be deter-mined from an amortization table for an…

A: Meaning of amortization table Amortization table is a table which consists of all the details…

Q: Which of the following would be an entry in the statement of changes in equity? Select one: a.…

A: Statement of changes in equity - It is the statement from the balance sheet. It is also called…

Q: Total free assets Net free assets Unsecured liabilities with priority

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: t relevant assertion should be used to record loans receivable net of an allowance for loan losses…

A: A loan receivable is that the amount of money owed from a human to a creditor (typically a bank or…

Q: Which of the following is not a category of financial assets under GAM? Group of answer choices…

A: Financial Assets are to be classified in the following four categories: 1. Financial Assets at fair…

Q: Determine whether the following statement is true or false, and explain why. A loan is amortized if…

A: Borrowing by an individual or a corporation is the method through which the individual and the…

Q: Which of the following is generally associated with payables classified as A/P? (A) Periodic…

A: Accounts payable means amounts repayable in respect of purchases made from suppliers.

Q: Typically, the estimated amount available for short-term payments in a statement of affairs…

A: Statement of accounts: It is the periodic statements summarizing all the account activity of the…

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

A: When the debt instruments are bought at off market terms, such instruments are measured at their…

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: under the conceptual framework for internationai financial reporting a non-contraling interest fits…

A: Non-controlling interest Non-controlling interest is also referred to as the minority interest…

Q: Under IFRS, receivables are to be reported on the balance sheet at: a. amortized cost. b.…

A: Amortization: Amortization is a process in which the cost of intangible assets is spread equally…

Q: Under a 75% LTV term loan structure, when is the balance of funds released by the lender to the…

A: Borrowing to purchase an asset: An asset can be purchased by taking a loan from a financial…

Q: A gain or loss from debt restructuring should be A. treated as increase or decrease in Paid-in…

A: Earlier gain or loss from debt restructuring was transferred to capital reserve, but now gain or…

Q: Computation and Calculation on how they get - Interest Received - Interest Income - Discount…

A: Bond Amortization - It is a principal paid regularly, along with its interest expenses over the life…

Q: Financial liabilities that are classified as amortized cost are subsequently measured at A. Partly…

A: Lets understand the meaning of financial liability. Financial liability is a contractual obligation…

Q: What accounting theory is applied in the treatment of interest of non-interest bearing notes?…

A: Solution Concept Non interest bearing notes Non interest bearing notes means the…

Q: Gains or losses from the early extinguishment of debt that is refunded can theoretically be…

A: Early extinguishment of debt: It refers to the situation in which the issuer calls the debt…

Q: If there is evidence that an impairment loss on loans and receivables has been incurred, the amount…

A: Impairment Loss = Carrying Value - Recoverable amount Recoverable Amount is higher of the…

Q: nvestment in debt instruments classified as FA@FVTOCI recognizes which of the following in OCI? A.…

A: For debt instruments measured at FVOCI, only the changes in Fair value is recognised in OCI.…

Q: An important application of -Select- loans. Each loan payment consists of interest and repayment of…

A: Loan amount = $11,000 Rate = 8% Time = 5 years

Q: Differentiate between the use of receivables in financing arrangements accountedfor as a secured…

A: Meaning of Financing with Receivable Financing receivable is refer as the arrangement in which…

Q: ne loans which are to be repaid within a short O a. Fixed liabilities b. Long-term liabilities C.…

A: Ans. Liabilities can be of many types - i. Current Liabilities ii. Non-current Liabilities iii.…

Q: Which of the following transaction costs will not be included in the pro-forma adjustment to net…

A: Net earnings are the net income or loss being generated by the business. Proforma adjustment to net…

Q: 1.- To which element does the following definition correspond: It is a format where interest and…

A: A loan refers to the sum of money borrowed, which is expected to be paid to the lender along with…

Q: what of the following is the correct calculation for interest cover : a- total debt / interest…

A: Interest coverage ratio is used to find out the ability of a company to pay interest on its debts…

Q: 1. According to PFRS 9, The amortized cost of a financial instrument is calculated using. A. The…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Which of the following statement/s are correct? (a) According to fair value measurement, assets are…

A: Fair value refers to the current worth or the amount at which the assets are sold in the market or…

Q: Which of the following is classified as nonmonetary? a. Cash surrender value b. Long-term receivable…

A: Nonmonetary item is an asset or liability that does not have a fixed exchange cash value, but whose…

Q: The track record with other creditors and suppliers is evaluated in which of the 5 Cs of Credit?…

A: The term "5 Cs of Credit" refers to the five primary elements used to establish a prospective…

Q: total assets. State the effect the following event occurring on the reporting date would have on…

A: Solution: Interest payment will reduce the Cash (an asset) because of which Average total Assets…

Q: When an asset is acquired and a note payable is assumed, explain how acquisition cost of the asset…

Q: Choose the correct. The cost of debt capital is calculated on the basis of: A. Net proceeds…

A: Cost of debt: It is that the average rate of interest an organization spends on its debts. It is the…

Q: 2. Which of the following correctly matches the classification of the debt investment with its…

A: IAS 32 and IAS 39, the previous IFRS financial instruments accounting standards, classified debt…

Q: The default subsequent measurement base for financial liabilities is: Select one: amortised cost…

A: Financial liabilities mean the obligation of the business that it needs to pay outside the business.…

Question

Loans and receivable should be measured subsequent to initial recognition at *

a. Amortized cost using the straight line method

b. Fair value

c. Fair value plus transaction cost

d. Amortized cost using the effective interest method

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1Basic Information

VIEW

Step 2 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Use IFRS 9 to determine how to subsequently measure the following financial assets. Three choices of measurement basis are amortized cost, fair value through other comprehensive income, and fair value through profit or loss. Provide justification for your choice. Long-term loans that are held for collecting contractual cash flows till their maturities, but may be subsequently sold if the loans’ credit risk substantially increases. Investments in bonds that are held for collecting contractual cash flows, and may be subsequently sold to re-invest the cash in financial assets with a higher return. Subprime (high risk) mortgage loans that were originated by a mortgage-broker firm that always sell these loans to banks right after their origination. Forward contracts that an EU bank purchased to hedge the exposure to changes in fair value of US$-denominated loans. Investment in bonds that are convertible into common stock of the bond issuer. Investment in bonds that pay a variable market…
1.-To which element does the following definition correspond: It is a format where interest and payments are normally calculated to settle a loan. A) Format for credit standards B) Inventory maintenance cost form. C) Depreciation table D) Amortization table (Choose one option)
In the context of handling debt - like items in M&A, what is the most buyer-friendly approach for items representing a hard claim that must be paid post-close? a. Purchase price adjustments b. Escrow accounts c. Insurance policies d. Working capital adjustments e. Debt refinancing
What relevant assertion should be used to record loans receivable net of an allowance for loan losses when allowance should adequately cover any estimated losses inherent in the loan portfolio but not excessive losses? a. Existence or occurrenceb. Valuation or allocationc. Cutoffd. Rights or obligations
Fair value is used to value which of the following balance sheet accounts? a. Prepaid expenses; patents; property, plant, and equipment b. Capital lease obligations, bonds payable c. Receivables net of allowance for doubtful accounts d. Debtsecurities available for sale, trading securities
1.-To which element does the following definition correspond: It is a format where interest and payments are normally calculated to settle a loan. A) Format for credit standards B) Inventory maintenance cost form. C) Depreciation table D) Amortization table
how are the origination fees borne by the borrower accounted for in relation to the initial measurement of a loan receivable a. Added to initial measurement of the loa receivable b. Deducted from the initial measurement of the loan receivable c. Ignored d. Either added to or deducted from the initial measurement of the loean receivable if the origination fees are at leasr 10% of the proncipal amount of the loan
Interest revenue for debt investments at fair value through other comprehensive income is computed based on the instruments’ a. face value using the effective interest rate. b. face value using the nominal interest rate. c. carrying amount using the effective interest rate. d. carrying amount using the nominal interest rate.
Under PFRS 15, what is the measurement of consignment sales revenue? a. realizable value of consideration received or receivaby b. cost of consideration received or receivable c. fair value of the consideration received or receivable d. book value of thw consideration received or receivable
Which of the following loan types has a beginning loan balance equal to the ending loan balance? Group of answer choices Interest-only Partially amortizing Negative amortizing Fully amortizing Equal amortizing
Under PFRS 15, what is the measurement of consignment sales revenue? A. Realizable value of consideration received or receivable B. Fair value consideration received or receivable C. Book value consideration received or receivable D. Cost of consideration received or receivable
Which of the following is not a category of financial assets under GAM? Group of answer choices A.Held to maturity investments B.Available for sale financial assets C.Financial asset at fair value through other comprehensive income D.Loans and receivable