Current Costs Should Not Be Used to Compute Either Return

question 47

True/False

Current costs should not be used to compute either return on investment (ROI) or residual income because current costs are not generally accepted accounting principles (GAAP).

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Definitions:

Judicial Remedy

Legal means through which a court enforces a right, imposes a penalty, or makes another court order to impose its will.

Execution

Execution refers to the carrying out of a plan, order, or course of action to its completion.

Levy

The obtaining of money by legal process through the seizure and sale of property, usually done after a writ of execution has been issued.

Buyer in Ordinary Course

A person who purchases goods in good faith from a seller who is in the business of selling such goods, without aware of any claims against the goods.