The Accountant of Barnes Architectural Services Failed to Make an Adjusting

question 119

Multiple Choice

The accountant of Barnes Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense.Which of the following statements is true?

• A)The total revenue will be overstated.
• B)The total revenue will be understated.
• C)The total expenses will be overstated.
• D)The total expenses will be understated.

Calculate the present value of future cash flows at different interest rates.

Understand the impact of interest rate changes on the present value of future cash flows.

Analyze investment decisions using NPV methodology.

Understand the role of vigilant investors in the economy.

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Definitions:

Sunk Costs

Sunk costs are expenses that have already been incurred and cannot be recovered.

Opportunity Costs

The forfeiture of possible benefits from different options when selecting one option over the others.

Terminal Cash Flow

The net cash flow received or paid at the end of a project's life, including salvage value and net working capital recovery.

Straight Line

A method of calculating depreciation or amortization by spreading the cost evenly over the useful life of an asset.