Which of the Following Is NOT an Accepted Approach for Determining

question 43

Multiple Choice

Which of the following is NOT an accepted approach for determining a business' worth?

• A) determining what the firm owns
• B) determining what the firm earns
• C) determining what the firm's return on investment has been
• D) determining what the firm will bring in the market
• E) All of the above are accepted approaches.

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Definitions:

Owner's Capital

The total value of all assets contributed by the owner to a business minus any withdrawals, representing the owner's equity in the company.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against the cost of a fixed asset, reducing its book value over time.

Permanent Account

An account that carries its ending balance over to the next accounting period, typically representing real accounts like assets, liabilities, and equity.

Closing Process

The steps taken at the end of an accounting period to prepare accounts for the next period, including zeroing out temporary accounts.