Which of the Following Is True

question 80

Multiple Choice

Which of the following is true?

• A) Present value concepts are used to determine accounting income
• B) The higher the hurdle rate, the larger the present value of the amount being discounted
• C) The further in the future a cash flow is, the smaller its present value will be
• D) None of these are true

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Definitions:

Expense Recognition

The accounting principle that costs are recorded in the period they are incurred in and matched with the revenues they help to generate.

Revenue Recognition

The accounting principle that determines the specific conditions under which income becomes realized as revenue.

Depreciable Asset

An asset subject to depreciation, which means its cost is allocated over its useful life due to wear and tear, deterioration, or obsolescence.