Which One of the Following Is the Graphical Representation of the Sum

question 38

Multiple Choice

Which one of the following is the graphical representation of the sum of the carrying costs and the opportunity costs of a credit policy?

• A)economic credit function
• B)credit analysis
• C)credit cost curve
• D)accounts receivables aging
• E)optimal credit curve

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Definitions:

Effective Interest Rate

The rate that discounts the estimated future cash payments or receipts through the expected life of the financial liability or asset or, when appropriate, a shorter period to the net carrying amount of the financial asset.

Reclassification Date

The specific date on which financial assets are reclassified between different categories, affecting how they are measured and recognized.

Fair Value

The amount one would earn from disposing of an asset or spend in delegating a liability in a seamless trade among market actors on the appointed valuation day.

AASB 9

An Australian Accounting Standard Board regulation that outlines the requirements for the classification, measurement, and impairment of financial instruments.