Which of the Following Is the Appropriate Measurement Focus for Custodial

question 10

Multiple Choice

Which of the following is the appropriate measurement focus for custodial funds?

• A) Economic resources.
• B) Current financial resources.
• C) Cash and cash equivalents.
• D) Accrual basis.

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Definitions:

Avoidable Interest

Interest costs that could be avoided if an entity did not make an expenditure for an asset under construction.

Construction Loan

A short-term loan used to finance the building of a home or another real estate project, with the property under construction serving as collateral.

Capitalization Of Interest

The process of adding accumulated interest to the principal balance of a loan, increasing the total amount owed.

Avoidable Interest

Interest cost on funds expended on a qualifying asset that could be avoided if the expenditure had not been made.