The Purpose of the Ledger Is to

question 157

Multiple Choice

The purpose of the ledger is to

• A) compile all source documentation materials that support each transaction.
• B) make sure that all accounts have credit balances at all times.
• C) record chronologically the day's transactions.
• D) update each account.

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Definitions:

NPV

A financial analysis approach that determines the present value of an investment's expected cash flows minus its initial cost, used to evaluate the attractiveness of projects.

Net Income

The net income of a company, calculated by deducting all costs and taxes from its total revenues.

Accounting Break-Even

The sales level that results in zero project net income.

Forecasting Risk

The possibility that errors in projected cash flows lead to incorrect decisions.