A Contra-Account

question 196

Multiple Choice

A contra-account:

• A)increases the original value of the account to which it relates.
• B)always appears in the same column of the trial balance as the account to which it relates.
• C)offsets,or reduces,another account.
• D)reduce the asset to its fair value.

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Definitions:

Hurdle Rate

Hurdle Rate is the minimum acceptable return on investment or project that a business requires before it considers it viable or proceeds with it.

Accounting Rate of Return

The return on an investment calculated by dividing the average annual profit by the initial investment cost, typically used to assess the profitability of potential investments.

Net Cash Flow

The difference between a company's cash inflows and outflows during a specific period.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the strategy and financial performance of an organization.