Question 11 / 1 ptsRevenue recognition rules state which of the following?A sale can only be recognized when cash changes hands.A sale can only be recognized when the title or ownership changes hands.Correct!It varies depending on the item and the nature of the sales contract.A sale can only be recognized when the product is received by the buyer.Question 21 / 1 ptsThe value of an asset is based on four characteristicscash flows, time, risk, andopportunity costsbut in many situations we can estimate an assets value by:ignoring risk, which simplifies the calculation.assigning our personal value to the asset.adding a risk premium to the current return on US government bonds.Correct!looking at its market price.Question 31 / 1 ptsWestern States Transport had net income of $337,000 in 2012. It had depreciationexpense during 2012 of $464,000. What is a rough estimate of the companys cash flowfor 2012?negative $127,000.negative $27,000.$337,000.Correct!$801,000.Question 41 / 1 ptsMarkets are said to be efficient if they:have very low transaction costs.Correct!quickly process and include new information in prices.tend to average out overpricing and underpricing.can forecast the future accurately.Question 51 / 1 ptsTo arrive at a more accurate estimate of cash flow we would add depreciation expenseto net income. The next step would be to:reduce our estimate by the increases in liabilities.reduce our estimate by ...
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