Which of the Following Is Not a Measure That Management

question 6

Multiple Choice

Which of the following is not a measure that management can use in evaluating and controlling investment center performance?

• A) rate of return on investment
• B) negotiated price
• C) residual income
• D) income from operations

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Definitions:

Effective-Interest Method

An accounting method to amortize the discount or premium on bonds payable or receivable over the bond's life, reflecting a constant rate of interest.

Market Rate

The current price or interest rate at which a good, service, or financial asset can be bought or sold in a competitive market.

Journal Entry

An accounting transaction entered into a ledger that denotes the financial activities of a company.

Statement of Cash Flows

A summary statement which tracks all cash inflows to a company from its regular business operations and funds received from investments, plus all cash outflows for paying business and investment costs within a certain period.