The Average Accounting Rate of Return Is Determined By

question 34

Multiple Choice

The average accounting rate of return is determined by:

• A) dividing the yearly cashflows by the investment.
• B) dividing the average cashflows by the investment.
• C) dividing the average net income by the average investment.
• D) dividing the average net income by the initial investment.
• E) dividing the net income by the cashflow.

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Definitions:

Cost Per Equivalent Unit

A calculation used in process costing, dividing total production costs by the number of units produced, accounting for partially completed units.

Process Costing

A costing method used when identical or similar goods or services are produced in mass quantities, assigning costs to units of product based on the process they go through.

Processing Departments

Specific areas or divisions within a manufacturing facility where distinct stages of production are carried out.

Cost Reconciliation

The process of matching and comparing costs from multiple sources of data to ensure consistency and accuracy in financial records.