Which of the following returns is consistent with contractual cash flows that are SPPI? I. Return for passage of time. II. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. III. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. IV. Return for amounts to cover expenses and a profit margin.
Which of the following returns is consistent with contractual cash flows that are SPPI? I. Return for passage of time. II. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. III. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. IV. Return for amounts to cover expenses and a profit margin.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 26BE
Related questions
Question
Which of the following returns is consistent with
contractual cash flows that are SPPI?
I. Return for passage of time.
II. Return for the risk that one party to a financial
instrument will cause a financial loss for the other
party by failing to discharge an obligation.
III. Return for the risk that an entity will encounter
difficulty in meeting obligations associated with
financial liabilities that are settled by delivering
cash or another financial asset.
IV. Return for amounts to cover expenses and a profit
margin.
a.) I, II, III and IV
b.) I, II and III only
c.) I and IV only
d.) II and III only
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