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Question
Some financial analysts contend that reporting debt at amortized historical cost rather than current market value
A. makes it more difficult to manipulate accounting numbers.
B. makes it easier to manipulate accounting numbers.
C. has no impact on the accounting numbers.
D. makes it impossible to manipulate the accounting numbers.
Answer
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Related questions
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Borrowers do not appear willing to pay substantially higher interest rates to retain accounting flexibility that may help them avoid covenant violations.
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Because covenant compliance can be jeopardized by mandated changes in accounting principles, many loan agreements have financial covenants that rely on the accounting rules in place when the loan is first granted.
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Commercial lending agreements may contain provisions that are designed to protect the lender from a deterioration of the borrower's creditworthiness.
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A. High earnings per share.
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A. artificially decrease the asset base.
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A. only the administrative costs of operations.
B. only the operating costs associated with operations.
C. all operating costs, depreciation, taxes, and a fair return on invested capital.
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A. base salaries.
B. short-term incentives.
C. long-term incentives.
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A. affirmative restrictions.
B. affirmative covenants.
C. negative restrictions.
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A. lenders.
B. borrowers.
C. both lenders and borrowers.
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B. the consignee.
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