The Five Basic Principles of Finance Include All of the Following

question 1

Multiple Choice

The five basic principles of finance include all of the following EXCEPT

• A) Cash flow is what matters.
• B) Money has a time value.
• C) Risk requires a reward.
• D) Incremental profits determine value.

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Definitions:

Cost of Goods Sold

The total cost incurred by a company to manufacture or acquire products sold during a specific period.

Raw Materials

Basic materials used in the manufacturing process to produce goods, often processed in several stages into components or finished products.

Work in Process

This includes partially finished goods that are in the process of being manufactured but are not yet complete.

Job-order Costing

A costing system used to determine the cost of producing specific jobs or batches, where costs are assigned to each job individually.