Which of the Following Is an Example of a Capital

question 23

Multiple Choice

Which of the following is an example of a capital market instrument?

• A) Commercial paper.
• B) Preferred stock.
• C) U.S.Treasury bills.
• D) Banker's acceptances.
• E) Money market mutual funds.

Understand the role and calculation of depreciation expense in accounting.

Explain the significance of profit margin and how it is calculated.

Distinguish between cash and accrual accounting principles.

Understand the concept of contra accounts and their use in financial reporting.

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Definitions:

Incremental Cash Flows

Incremental cash flows are the additional cash inflows or outflows expected from a new project or investment when compared to a baseline scenario.

Net Operating Working Capital

The difference between a company's operating current assets and its operating current liabilities, indicating the efficiency and short-term financial health in the company's core operations.

Terminal Loss

The amount that can be deducted against income if, on the sale of the last asset in an asset class, the undepreciated capital cost is positive.

CCA Recapture

In Canadian taxation, the portion of the Capital Cost Allowance that is added back to income when an asset is disposed of for more than its undepreciated capital cost.