If you take any personal financial classes, you will more than likely hear and be warned...

If you take any personal financial classes, you will more than likely hear and be warned about keeping out of debt. For instance, Proverbs 22:7 says, "The rich rules over the poor, and the borrower is servant to the lender." Yet, from an accounting perspective, the balance sheet incorporates liabilities (debts) and is part of the accounting equation. If you wanted to run your business according to godly principles, how could you balance this with the idea of borrowing money to start a business or to grow a business?

Expert Solution

Well debt can be a good tool if used properly and very harmful if used unproperly. Businesses can grow through debt, because it will provide various tax benefit.

How you can reduce your tax is that while calculating Profit after tax (PAT) you have to pay interest on your borrowings and through this way your Profit after interest before tax(PAIBT) is reduced and then you can calculate tax, and then you will get reduced PAT.

So businesses get help with the debt because we can use that money to run our business and grow our business too.

On the other hand, there is always a doubt that our business will run or not, so if our business doesn't run so it'll get shut down because after that we can't operate after a certain time because we have already taken the loan to run our business and slowly we'll run out of money.

Or we can take more loan but again there is a great risk of taking loan because the interest on borrowing is a pain and you have to pay interest on regular basis.

In this way the debt become a problem for us because if business income is less then we have to pay the money from our own pockets, and it'll be a terrible situation for us.

This 22:7 rule also says that the rich rules on poor because, rich people don't much depend on debt, becuase they know that it's not good for anyone and the interest is a big burden and a timely payment is also a burden.

Whereas poor people or those who took loan, most of their life is gone in paying the instalments and they can't do things according to them. They have to prepare their budget according to the instalments which have to be paid first then think about other things.

So we can say that debt is not good for anyone.

ekkarill92 answered 2 years ago

More students prefer to take 10 a..m. classes than 8 a.m. classes, meaning that the demand...

More students prefer to take 10 a..m. classes than 8 a.m. classes, meaning that the demand for seats in 10 a.m. classes at the university is higher than the demand for seats in 8 a.m. classes. The supply of seats is fixed. If the university can only charge one price, regardless the time, but wishes to maximize the total number of seats purchased during the day, it should set the price a. at equilibrium for 8 a.m. classes. b. at...

A researcher whether introverts are more likely to prefer online classes than extraverts. They decide to...

A researcher whether introverts are more likely to prefer online classes than extraverts. They decide to test this theory by asking a sample of n = 80 people (a) whether they are an introvert or an extravert, and (b) whether they prefer online or InPerson classes. Below is the data from the study: Online InPerson Introvert ƒo = 8 ƒo = 19 Extravert ƒo = 23 ƒo = 30 (a) Compute df and determine the critical value for χ2 for...

Why are the indirect costs of financial distress likely to be more important than the direct...

Why are the indirect costs of financial distress likely to be more important than the direct costs of bankruptcy? (Choose the correct response.) A. Many indirect costs may be incurred even if the firm is not yet in financial distress, but simply faces a significant possibility that it may occur in the future. B. None of the above - both direct and indirects costs are equally important. C. Direct costs and costs to debt holders, whereas indirect costs affect both...

You can take any aspect of cell transport and elaborate on it in more detail. For...

You can take any aspect of cell transport and elaborate on it in more detail. For example, how it works, what is getting transported, why transport is important, specific features, what happens when it goes wrong, how it is connected to other cellular processes like signaling or metabolism, how it can be involved in medical conditions, or why drugs might be used to change transport of certain molecules in some way. There are certainly a number of different ways you...

This is the full questions no more details. take any amount you need to accomplish this...

This is the full questions no more details. take any amount you need to accomplish this problem. 1. Choose a salary that you want to have at age 25. Assume that you get raises that keep up with the cost of inflation. Assume that you contribute 10% of your income to your retirement plan. Assume your own rate of return on your money. How much do you need to have saved if you retire at 40 and live to 90?...

You assume that students are more likely to miss a standardized test scheduled in April than...

You assume that students are more likely to miss a standardized test scheduled in April than December. You ask 11 professors from 11 different schools who all teach a full year course to keep track of the number of students who are ill during the testing period for each term. The table shows you how many students missed a test for each testing period for the 11 different schools: class Dec April + - RANK-Dec RANK-April D...

For osteoporosis, since women are more likely to develop osteoporosis more than men. Why is this...

For osteoporosis, since women are more likely to develop osteoporosis more than men. Why is this the case? What are possible reasons that women are more likely to develop osteoporosis and what are the causes?

Do students in early morning classes do more poorly than students in later classes? During one...

Do students in early morning classes do more poorly than students in later classes? During one semester of Quan 2010, exam scores were averaged for one section of 28 students who met at 8:00am, and for another section of 37 students who met at 10:50am. The earlier section had a mean score of 80.6 with a variance of 103, while the later section had a mean score of 81.5 with a variance of 138. At a significance level of...

A vaccine for Coronavirus is likely to take a longer time than imagined, because the most...

A vaccine for Coronavirus is likely to take a longer time than imagined, because the most obvious target of the vaccine should be the external spike protein on the envelope of this enveloped virus. The cellular attachment protein on epithelial cells, which the virus binds to for entry into the epithelial cell, is known to be ACE2, a receptor enzyme. Explain why the production of a vaccine targeting the coronavirus spike protein (S1), is not likely to be successful.

why are men more likely to have colon cancer than women

Question