Multiple Choice Question 28 Most of the capital budgeting methods use accrual accounting revenues. accrual accounting numbers. cash flow numbers. net income.
Cash flow numbers
Capital budgeting method examples are net present value, payback period, accounting rate of return. They all use the cash flow numbers
Multiple Choice Question 28 Most of the capital budgeting methods use accrual accounting revenues. accrual accounting...
When the amount of revenue collected in advance decreases during an accounting period: Multiple Choice Accrual-basis revenues exceed cash collections from customers. Accrual-basis net income exceeds cash-basis net income. Accrual-basis revenues are less than cash collections from customers. May exceed, equal or be less than cash payments to suppliers.
Professor’s Question: "Most companies will use accrual accounting. Why? It is easier to compare amounts from one period to another. The cash basis makes it more difficult to compare numbers. Why do we compare numbers in a manufacturing company? Why do we compare numbers by products? Why do we compare numbers by similar companies? Do you think Apple and Samsung keep up with numbers from each other and their other competitors? In business, one of the most important things is...
Multiple Choice Question 29 The first step in the capital budgeting evaluation process is to request proposals for projects. screen proposals by a capital budgeting committee. determine which projects are worthy of funding. approve the capital budget.
What is the purpose of the accrual basis of accounting? Multiple Choice Recognize revenue when it is collected from customers. Match assets with liabilities during the proper accounting period. Recognize expenses when cash disbursements are made. Recognizing revenue when it is earned and expenses when they are incurred, regardless of when cash changes hands.
The first step in the capital budgeting process is Multiple Choice collection of data. idea development. assign probabilities. determine cash flows
Match each capital budgeting method with its definition METHODS 1. Accounting rate of retur 2 Internal rate of return 3. Net present value 4. Payback DEFINITIONS is only concerned with the time i&takes to get cash outflows retuned b. Considers operating income but not the time value of money in its analyses. Companes the present value of cash outflows to the present value of cash infiows to determine investment worthiness d. The true rabe of return an investment earns
Accrued revenues: Multiple Choice At the end of one accounting period result in cash receipts in a future period. At the end of one accounting period often result in cash payments in the next period. Are also called unearned revenues. Are recorded at the end of an accounting period because cash has already been received for revenues earned. Are listed on the balance sheet as liabilities.
STUDY PROBLEM 1-15 MULTIPLE CHOICE QUESTIONS ONS urred while earning revenues arned, and reported 1. The principle stating that all expenses incurred while earnin should be identified with the revenues when they are earned for the same time period is the: A. Cost Principle B. Revenue Principle SVP TO C. Expenses Principle 10 mobilo MSTURE D. Matching Principle n E. Timing Principle 2. The distinct The distinction between a current asset and other assets: A. is based on how long...
Since most companies use accrual based accounting, what is the purpose of the cash flow statement to a company's decision makers? Give a real life example.
When discounted cash flow methods of capital budgeting are used, the working capital required for a project is ordinarily counted as a cash inflow at the beginning of the project and as a cash outflow at the end of the project. True or False