The Basic Cost Flow Equation Is Used by

question 31

Multiple Choice

The basic cost flow equation is used by

• A)independent auditors to perform reasonableness checks on the data they receive from clients.
• B)companies to check that the amount of inventory recorded on the books matches the physical count of inventory.
• C)independent auditors and companies to check for thefts or financial fraud.
• D)All of the answers are correct.

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Definitions:

Capital Market

The input/factor market in which households supply their savings, for interest or for claims to future profits, to firms that demand funds to buy capital goods.

Investment

New capital additions to a firm’s capital stock. Although capital is measured at a given point in time (a stock), investment is measured over a period of time (a flow). The flow of investment increases the capital stock.

Demand Curve

A graph showing the relationship between the price of a good and the amount of it that consumers are willing to purchase at various prices.

Hoverboards

Self-balancing scooters that use gyroscopic technology to allow users to move based on the direction and speed of their body lean.