Generally Accepted Accounting Principles GAAP Require Companies to

question 60

Multiple Choice

Generally Accepted Accounting Principles GAAP require companies to

• A)Report selected information about operating segments in the annual report.
• B)Prepare financial statements using a cash basis.
• C)Report information based on responsibility centers.
• D)Report information in single-step format.

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Definitions:

Cash Flow

The combined value of financial transactions into and out of an enterprise, crucially affecting its cash reserves.

Present Value

is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Discount Rate

The rate of interest utilized to calculate the current value of future cash flows in a discounted cash flow assessment.

Incremental Net Income

The additional net income that results from a specific business decision compared to an alternative.