BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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depreciation expense.
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interest expense
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costs of goods sold.
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both A and B.
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Detailed explanation-1: -Financing cost (FC), also known as the cost of finances (COF), is the cost, interest, and other charges involved in the borrowing of money to build or purchase assets.
Detailed explanation-2: -The definition of finance costs includes mortgage interest and interest on loans to buy a furnishing and suchlike. Relief is also available for the incidental costs of obtaining finance, as long as the interest on the loan is allowable.
Detailed explanation-3: -Finance costs are usually understood to be referred to interest costs. Usually they are thought to refer to interest expense on short-term borrowings (for example bank overdraft and notes payable) and long-term borrowings (for example term loans and real estate mortgages).
Detailed explanation-4: -Interest expense usually appears below the EBIT (Earnings Before Interest and Taxes) as a separate line on the income statement.