Which of the Following Is a True Statement About Accounting

question 61

Multiple Choice

Which of the following is a true statement about accounting for business activities?

• A)An overall accounting method can only be adopted with the permission of the Commissioner.
• B)An overall accounting method is initially adopted on the first return filed for the business.
• C)The cash method can only be adopted by individual taxpayers.
• D)The accrual method can only be adopted by corporate taxpayers.
• E)None of the choices are true.

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Definitions:

Profitability Index

A financial metric that calculates the relative profitability of an investment by dividing the present value of future cash flows by the initial investment cost.

Required Rate

The minimum return an investor expects to achieve by investing in a particular asset, often used in capital budgeting.

Profitability Index

A ratio that compares the present value of future cash flows generated by an investment to the investment's initial cost, indicating its relative profitability.

Required Rate Of Return

The minimum annual percentage return an investor expects to achieve from an investment.