Cash Flow at Disposal of an Asset Can Be Calculated

question 15

Multiple Choice

Cash flow at disposal of an asset can be calculated as the disposal value plus the ________ on the loss.

• A)alternative minimum tax
• B)statutory tax
• C)tax shield
• D)tax credit

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Definitions:

Net Realizable Value

The estimated selling price of goods minus the costs of their sale or disposal.

Conservatism Constraint

An accounting principle that provides guidance for uncertain conditions, advising to recognize expenses and liabilities sooner rather than later.

Historical Cost Principle

An accounting principle that states that assets should be recorded and reported at their original purchase cost.

Work in Process

Inventory that includes goods that are in the process of being manufactured but are not yet complete.