Which of the Following Is Not a Statement About the Allowance

question 5

Multiple Choice

Which of the following is not a statement about the Allowance for Funds Used During Construction (AFUDC) ?

• A) AFUDC may have either a debt component or an equity component.
• B) The amount credited to AFUDC may exceed the amount of interest paid during the period on bonds issued for construction.
• C) AFUDC may be credited for an imputed amount of interest on the utility's own funds used for construction.
• D) AFUDC may include the total amount of borrowing during construction.

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Definitions:

Judgment Pro Rata

A legal principle where the amount awarded or decided in judgment is distributed proportionally among creditors or claimants based on the size of their claims.

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Assets or belongings that are not attached to or part of real estate; movable property.

Chattel

Tangible personal property that is movable as opposed to real property or real estate.

Patent

A legal right granted by a government to an inventor, giving exclusive rights to the patented process, design, or invention for a certain period.