Which of the Following Is True About the Capital Budgeting

question 85

Multiple Choice

Which of the following is true about the capital budgeting process?

• A) Management identifies a list of potential projects that are consistent with the business strategy and ranks them according to the value they would create for the shareholders.
• B) Rapid growth is considered a desirable achievement in capital budgeting decisions.
• C) The cost of the projects should comply with the firm's budget constraints.
• D) All of these

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Definitions:

Voucher Journal

A record that details every financial transaction of a business, paired with the documentation that supports the transaction as a part of the accounting system.

Voucher System

A control mechanism in accounting that ensures all purchases and expenditures are properly authorized before payment is made.

Petty Cash Fund

A small amount of cash kept on hand for minor or incidental expenses.

Voucher System

A control mechanism in accounting that involves authorization and documentation before a financial transaction is made.