Three Key Management Assertions About Items on the Balance Sheet

question 43

Multiple Choice

Three key management assertions about items on the balance sheet are ________.

• A)occurrence,completeness,and accuracy
• B)classification,existence,and cut-off
• C)confirmation,presentation,and disclosure
• D)existence,completeness,and presentation

Master the calculation of the payback period for investment projects and its relevance in investment decisions.

Understand the treatment of working capital in investment project evaluations.

Recognize the reinvestment assumption inherent in the IRR and NPV methods.

Analyze the relevance of a project's cash inflows, investment outlays, and operational income in determining its financial viability.

---

Definitions:

Variable Costs

Costs that change in proportion to the level of production or business activity, such as materials and labor directly involved in manufacturing.

Lawn-mowing

The act of cutting the grass of a lawn to maintain its appearance and health.

Perfectly Competitive

A market structure where there are many buyers and sellers, all of whom have negligible impact on the market price.

Marginal Cost

The increment in total spending due to the manufacture of one more unit of a product or service.