Under the Cash Basis of Accounting, the Receipt of Cash

question 32

Multiple Choice

Under the cash basis of accounting, the receipt of cash from a customer in advance of performing the service would be credited to a(n) :

• A)prepaid asset account.
• B)deferred asset account.
• C)unearned revenue account.
• D)revenue account.

Understand the implications of salvage value and working capital in investment decisions.

Calculate and apply the payback period method for investment appraisal.

Appreciate the importance of the cost of capital in investment decisions.

Use profitability index to rank investment projects.

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Definitions:

Extrasensory

Perception or communication outside of normal sensory processes, often referred to as ESP.

Telepathy

The presumed exchange of thoughts or ideas through methods beyond the recognized senses.

Precognition

The ability or claimed ability to perceive events in the future or beyond normal sensory contact.

Clairvoyance

The supposed ability to gain information about an object, person, location, or physical event through means other than the known human senses.