Under Generally Accepted Accounting Principles Management Has the Choice of Physically

question 122

True/False

Under generally accepted accounting principles management has the choice of physically counting inventory on hand at the end of the year or using the gross profit method to estimate the ending inventory.

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Definitions:

Accounting Break-Even

The point at which total costs and total revenues are exactly equal, resulting in neither profit nor loss.

Net Income

The net income of a company once all costs and taxes are subtracted from its revenues.

Internal Rate

Internal rate, likely referring to the internal rate of return (IRR), is a financial metric used to evaluate the profitability of potential investments, representing the discount rate that makes the net present value (NPV) of all cash flows equal to zero.

Accounting Break-Even

The point at which total revenues equal total expenses, resulting in no net loss or gain for a business.