Which of the Following Concepts Represents Time Value of Money

question 28

Multiple Choice

Which of the following concepts represents time value of money?

• A)the concept that money becomes obsolete over time
• B)the concept that money earns income over time
• C)the concept that money loses its purchasing power over time
• D)the concept that money can be converted into other currencies over time

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Definitions:

Recoverable Amount

The higher of an asset's fair value less costs to sell and its value in use. It's the estimated amount an entity can obtain from an asset's use or sale, covering its carrying amount.

Carrying Amount

The value at which an asset is recognized on the balance sheet after deducting accumulated depreciation and impairment charges.

Cost Method

An accounting method used to record investments in which the investment is recorded at cost and dividends are recognized as income.

Dividends

Dividends are payments made by a corporation to its shareholder members, distributing a portion of the company's earnings.