Which of the Following Accounts Does Cash Basis Accounting Ignore

question 24

Multiple Choice

Which of the following accounts does cash basis accounting ignore?

• A)Payables
• B)Revenue
• C)Cash
• D)Expenses

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Definitions:

Net Present Value (NPV)

A financial metric used to evaluate the feasibility of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows.

Capital Cost Allowance (CCA)

A tax deduction in Canada that represents a yearly depreciation charge for the cost of assets.

After-Tax Cost Savings

The reduction in expenses that result from deductions on taxes, essentially the net savings after accounting for tax effects.

Salvage Value

The estimated value at which an asset can be sold at the end of its useful life.