All of the Following Statements Regarding the Double-Entry System Are

question 160

Multiple Choice

All of the following statements regarding the double-entry system are true except

• A)a two-sided effect of each transaction is recorded in appropriate accounts when using the double-entry system.
• B)the double-entry system provides a logical method for recording transactions.
• C)both sides of the accounting equation must be affected when recording a transaction using the double-entry system.
• D)when using the double-entry system, the sum of all debits to the accounts must equal the sum of all credits.

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Definitions:

WACC

In calculating a firm’s capital costs, the Weighted Average Cost of Capital method considers the proportionate weights of different capital categories.

WACC

Weighted Average Cost of Capital; the average rate of return a company is expected to pay its shareholders for using their capital.

NPV

Net Present Value, a calculation that compares the value of all cash inflows and outflows of a project or investment using a discount rate.

Cash Inflows

The movement of money into a business or project, typically from operations, financing, or investing activities.