Which of the Following Statements Is True

question 40

Multiple Choice

Which of the following statements is true?

• A) U.S.Treasury securities with relevant maturities are used as the basic cost of money and lenders add premiums for risk and other factors.
• B) Some lenders determine a prospective borrower's risk class and determine the rates charged on loans with similar maturities by firms in the same risk class.
• C) All borrowers are charge the same rate regardless of their risk class.
• D) Both (a)and (b)are true
• E) None of the above statements are true.

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Definitions:

Completed Contract

This accounting practice records the income and expenses of projects after they are finalized, ensuring financial statements only reflect finished work.

Percentage-of-Completion

An accounting method that recognizes revenues and expenses in relation to the completion percentage of a project.

Revenue Recognition

The accounting principle dictating the specific conditions under which income becomes recognized as revenue on the financial statements.

Accounting System

An accounting system is the method by which financial information is collected, processed, and reported to stakeholders.