The Fact That a Proposed Project Is Analyzed Based on the Project's

question 86

Multiple Choice

The fact that a proposed project is analyzed based on the project's incremental cash flows is the assumption behind which one of the following principles?

• A)underlying value principle
• B)stand-alone principle
• C)equivalent cost principle
• D)salvage principle
• E)fundamental principle

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Definitions:

Total Debits

The sum of all debit entries in an account, which can represent increases in assets or expenses, and decreases in liabilities, equity, and income.

Total Credits

The sum of all credit entries in an accounting system, representing the total amount by which liabilities, equity, and revenue accounts increase.

Trial Balance

An accounting report that lists the balances of all ledgers accounts in order to ensure that total debits equal total credits.

Financial Transaction

A financial transaction refers to an agreement, or communication between a buyer and seller to exchange an asset for payment. It involves a change in the status of the finances of two or more businesses or individuals.