Which one of the following is violated when a firm reports its long-term debt at the present value of the cash flows associated with that debt? Matching No violations occurred. This accounting is correct. Revenue recognition Gross value of the debt

Which one of the following is violated when a firm reports its long-term debt at the present value of the cash flows associated with that debt? Matching No violations occurred. This accounting is correct. Revenue recognition Gross value of the debt

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

QUESTION 41

Which one of the following is violated when a firm reports its long-term debt at the present value of the cash flows associated with that debt?

Matching

No violations occurred. This accounting is correct.

Revenue recognition

Gross value of the debt

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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