Financial Management - Study Mode

[#906] Earnings that are not paid as dividends to stockholders and have cumulative amount are classified as
Correct Answer

(C) retained earnings

Explanation

Solution: Earnings that are not paid as dividends to stockholders and have cumulative amount are classified as retained earnings. Retained earnings are the profits that a company has earned to date, less any dividends or other distributions paid to investors. This amount is adjusted whenever there is an entry to the accounting records that impacts a revenue or expense account.

[#907] In time value of money, periodic rate is
Correct Answer

(B) shown on timeline

Explanation

Solution: In time value of money, periodic rate is shown on timeline. A periodic interest rate can be charged on a loan or realized on an investment over a specific period of time.

[#908] Claim against assets are represented by
Correct Answer

(B) retained earnings

Explanation

Solution: Claim against assets are represented by retained earnings. Retained earnings are the profits that a company has earned to date, less any dividends or other distributions paid to investors. This amount is adjusted whenever there is an entry to the accounting records that impacts a revenue or expense account.

[#909] Rate charged by bank 12.5% on credit loans and 3% semi-annually on instalment loans is considered as
Correct Answer

(A) periodic rate

Explanation

Solution: Rate charged by bank 12.5% on credit loans and 3% semi-annually on instalment loans is considered as periodic rate. A periodic interest rate can be charged on a loan or realized on an investment over a specific period of time.

[#910] In weighted average capital, capital structure weights estimation does not rely on value of
Correct Answer

(C) book value of equity

Explanation

Solution: In weighted average capital, capital structure weights estimation does not rely on value of book value of equity. Book value of equity, also known as shareholder's equity, is a firm's common equity that represents the amount available for distribution to shareholders.