The Cash Over and Short Account

question 182

Multiple Choice

The Cash Over and Short account:

• A)Is used to record a credit balance in the cash account.
• B)Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and from missing petty cash receipts.
• C)Is not necessary in a computerized accounting system.
• D)Can never have a debit balance.
• E)Can never have a credit balance.

Understand the treatment and implications of depreciation for tax purposes.

Identify the significance of salvage value and recovery of working capital in the final year cash flow of a project.

Approach subjectively estimated cash flows with caution, incorporating conservative and reasonable estimates.

Understand the principles of capital budgeting decisions.

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Definitions:

U.S. Dollar

The official currency of the United States, widely used as a benchmark in global financial transactions.

Appreciates

Refers to an increase in value or price of an asset, currency, or commodity over time.

Purchasing Power Parity

A theory that states prices of goods and services should equalize across countries when expressed in a common currency, meaning a basket of goods should cost the same regardless of the country after accounting for exchange rates.

Big Mac

a hamburger sold by the international fast-food chain McDonald's, often used as a symbol of globalization and sometimes as a reference point in economic studies like the Big Mac Index.