Under which of the following approaches, the cost of equity is assumed to increase linearly with leverage, i.e., the average cost of capital remains constant with increased use of leverage?

The nature of financial accounting is:

A. Historical

B. Forward looking

C. Analytical

D. Social

Interest on drawings is:

A. Expenditure for the business

B. Cost for the business

C. Gain for the business

D. None of the above

Which of these items would be accounted for as an expense?

A. Repayment of bank loan

B. Dividend to stock holders

C. The purchase of land

D. Payment of current period rent

Debit the receiver credit the giver rule for:

A. Real a/c

B. Personal a/c

C. Nominal a/c

D. None of these