Identify Which of the Following Statements Is True

question 45

Multiple Choice

Identify which of the following statements is true.

• A) The Bardahl formula uses the concept of working capital, cash over current liabilities.
• B) The Bardahl formula is based on the firm's inventory period, receivables period, credit period, and total cash expenditures for cost of sales and operating expenses.
• C) The Bardahl formula provides mathematical exactness when calculating reasonable working capital needs for accumulated earnings tax purposes.
• D) All of the above are false.

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Definitions:

Disposed

Refers to the act of selling, transferring, or getting rid of an asset or property owned by an individual or company.

Gain

The increase in value of an asset or decrease in liabilities resulting in an increase in owners' equity, except those relating to contributions from owners.

Fully Depreciated

The status of an asset whose entire cost has been expensed and has reached the end of its useful life according to accounting standards.

Gain on Disposal

The financial profit obtained from the sale of a fixed asset when the sale price exceeds the book value of the asset.