Permanent Accounts

question 234

Multiple Choice

Permanent accounts:

• A) are not permitted under GAAP .
• B) have their balances zeroed-out at the end of each accounting year.
• C) do not have their year-end balance carried into the next year.
• D) are Balance Sheet accounts.

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Definitions:

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to present value future cash flows, or in other cases, the central bank's interest rate for banks.

Net Present Value

The contrast between the present-valued cash inflows and outflows over a determined period.

Working Capital

The gap between a business's current assets versus its current liabilities, reflecting its short-term solvency and efficiency in operations.

Investment Project

An endeavor in which resources are invested with the goal of generating future returns, typically involving financial, time, or other forms of resources.