The primary disadvantage of accrual accounting

Assignment Help Financial Management
Reference no: EM13894436

The primary disadvantage of accrual accounting is that

A. it does not match revenues and expenses in the period in which they are incurred. B. it does not appropriately measure accounting profit.

C. it does not recognize accounts receivable.

D. it does not adequately show the actual cash flows of the firm.

Reference no: EM13894436

Questions Cloud

Role of literature in a citizen education : This essay is your opportunity to think about the role of literature in a citizen's education. The broad question is, how can Metamorphoses by Ovid help citizenFreaders? But here's the specific question you must answer for this essay: Which two pa..
What is capital intensity ratio : ABC had assets of $15 million last year; sales were $18 million; liabilities plus accruals that increased spontaneously with sales was 8% of assets; net income was $275,000 of which $120,000 was paid out in the form of dividends. What is ABC's capita..
Analyze how the diversity of different stakeholder : analyze how the diversity of different stakeholder preferences can impact the organization's social responsibility initiatives
Project that requires an initial cash outlay for equipment : Carter & Carter (C&C) is considering a project that requires an initial cash outlay for equipment of $6.3 million. The equipment will be depreciated to a zero book value over the 4-year life of the project. At the end of the project, C&C expects to s..
The primary disadvantage of accrual accounting : The primary disadvantage of accrual accounting is that
Which account represents the cumulative earnings of the firm : Which account represents the cumulative earnings of the firm since its formation, minus dividends paid?
How use social networking to create viral marketing campaign : Explain how you could use social networking to create a viral marketing campaign for your group. Identify three feasible viral hooks.
How much should they set aside monthly to afford the remodel : Tim and Denise just bought a very old house. They love the charm of it but know it will need a major remodel within the next 10 years. The plan is for the remodel to take 2 years with $10,000 being spent on electrical upgrades during year one and $10..
Characteristics of external internal and construct validity : Write a paper in which you compare and contrast the characteristics of external, internal, and construct validity. In addition, please identify the threats to external and construct validity

Reviews

Write a Review

Financial Management Questions & Answers

  Interest deferred period the loan accumulated interest

Bank of Land lends you money today but requires no payments for 3 years. However, during this interest deferred period the loan accumulated interest at 6% rate, compounded quarterly. The bank amortizes the loan over five year period, requiring quarte..

  Determine the net present value for the project

Dennison, Texas cell-phone giant Cellular Two is evaluating a proposal to manufacture and sell digital phones in Great Britain. The project will require an initial investment of £200 million to acquire and recondition the manufacturing plant in Manch..

  Proceeds to repurchase shares-what is the wacc

O’Connell & Co. expects its EBIT to be $83,000 every year forever. The firm can borrow at 11 percent. O’Connell currently has no debt, and its cost of equity is 15 percent and the tax rate is 35 percent. The company borrows $144,000 and uses the proc..

  Discuss the differences between customer relationship

write 400ndash600 words that respond to the following questions with your thoughts ideas and comments. this will be the

  The internal growth rate

Its net income this year is $19,500 and it pays dividends of $5,400. If it grows at its internal growth rate, what will its debt/equity ratio be next year? The internal growth rate is __ %

  What is the target stock price in one year

Fly Away, Inc., has balance sheet equity of $5.7 million. At the same time, the income statement shows net income of $843,600. The company paid dividends of $459,762 and has 120,000 shares of stock outstanding. If the benchmark PE ratio is 21, what i..

  What is the project NPV using a discount rate

Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $ 95,000 and will generate net cah inflows of $21,000 per year for 11 years. What is the project NPV u..

  What are the common stockholders residual claims to earnings

Folic acid inc. has $20 million in earnings pays $2.75 million in interest to bondholders and $1.80 million in dividends to preferred stockholders. a) What are the common stockholders residual claims to earnings? b) What are the common stockholders l..

  Issue a bond with semi-annual coupon payments

XYZ Company is about to issue a bond with semi-annual coupon payments, a coupon rate of 9%, and par value of $1,000. The yield-to-maturity for this bond is 11%. What is the price of the bond if the bond matures in five, ten, fifteen, or twenty years?

  What is the default risk premium on the corporate bond

A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of 8.75%. Assume that the liquidity premium on the corporate bond is 0.3%. What is the default risk premium on the corporate bond? Round your answer to t..

  Higher debt-to-equity ratio than firm

If firm A has a higher debt-to-equity ratio than firm B, then

  Needs to plow back its earnings to fuel growth

What is the current share price? Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next seven years, because the firm needs to plow back its earnings to fuel growth.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd