The Payback Period Is Determined Using Which of the Following

question 99

Multiple Choice

The payback period is determined using which of the following formulas?

• A) Amount to be invested / Annual average net income
• B) Annual net cash flow / Amount to be invested
• C) Annual average net income / Amount to be invested
• D) Amount to be invested / Annual net cash flows

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Definitions:

Adjusting Entries

Journal entries made in accounting to update the records for revenues and expenses that have accrued but not yet been recorded through standard accounting transactions.

Prepaid Expenses

Costs paid in advance of their use, such as insurance or rent, which are recorded as assets on a balance sheet until they are actually incurred.

Recorded

The process of documenting financial transactions in the accounting records of a business.

Adjusted Trial Balance

A trial balance taken after adjustments have been made, used for preparing financial statements.