A Project That Simply Breaks Even on an Accounting Basis

question 63

True/False

A project that simply breaks even on an accounting basis gives you your money back but does not cover the opportunity cost of the capital tied up in the project.

---

Definitions:

Periodic Inventory System

An inventory management method where stock levels and the cost of goods sold are calculated at set intervals.

Terms 2/10, N/30

Payment terms indicating that a buyer can take a 2% discount if the bill is paid within 10 days, with the net amount due in 30 days.

Net Method

An accounting technique where discounts for early payment are assumed to be taken, reducing the amount recorded as accounts receivable.

Periodic Inventory System

An inventory valuation method where the inventory count and cost of goods sold is determined at the end of the accounting period.