Asked by Lisbeth Molina on Jun 03, 2024
Verified
The cash flow on total assets ratio is not affected by accounting recognition and measurement.
Accounting Recognition
This refers to the process of recording financial transactions in the financial statements according to accepted accounting principles.
Cash Flow
The total amount of money being transferred into and out of a business, especially affecting liquidity.
- Understand the theory and computation of the cash flow on total assets ratio.
Verified Answer
TW
Tykieya WatsonJun 05, 2024
Final Answer :
True
Explanation :
The cash flow on total assets ratio is calculated by dividing operating cash flow by total assets. This calculation is based on actual cash flows and does not depend on accounting recognition and measurement. Therefore, the ratio is not affected by these factors.
Learning Objectives
- Understand the theory and computation of the cash flow on total assets ratio.
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