The Formula for the Accounting Rate of Return Is

question 51

Multiple Choice

The formula for the accounting rate of return is:

• A)average profit over the period of the investment divided by average investment.
• B)average investment divided by average profit over the period of the investment
• C)the sum of the expected cash inflows for the period of the investment minus the sum of the expected cash outflows for the period of the investment
• D)none of the options gives the formula for the ARR

Recognize the classification and treatment of asset, liability, and equity accounts in financial statements.

Appreciate the role and mechanics of adjusting and closing entries in the accounting cycle.

Identify the characteristics and classification of assets, liabilities, and equity on the balance sheet.

Comprehend the revenue recognition principle and its application in different scenarios.

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Definitions:

Inflation Rate

A percentage-based uplift in the cost of goods and services within an economy over a designated timeframe.

Zero-inflation

A situation where the price level of goods and services remains constant over time, indicating an absence of inflation in the economy.

Phillips Curve

An economic concept that describes an inverse relationship between rates of unemployment and corresponding rates of inflation, suggesting that higher inflation is associated with lower unemployment and vice versa.

1970s

A decade marked by significant events including economic turmoil, the oil crisis, social movements, and the Cold War's continuing tension.