A Method of Determining the Value of a Business Based

question 56

Multiple Choice

A method of determining the value of a business based on the worth of its assets is called ______.

• A) balance sheet method of business valuation
• B) asset method of business valuation
• C) income statement method of valuation
• D) cash-flow method of valuation

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Definitions:

Valuation of Inventories

The process of determining the monetary value of inventory, using methods like FIFO, LIFO, or weighted average cost.

Management Decision Making

The process managers use to identify and solve problems, involving the evaluation of options and selection of strategies.

Pricing Decisions

Pricing decisions involve determining the selling price of goods or services, taking into account factors like costs, market demand, competition, and margins.

Process Costing

An accounting methodology used to assign costs to masses of similar units of product to calculate the cost per unit, typically used in industries where products are indistinguishable, like chemicals or food processing.