A Limitation of the Balance Sheet in Portraying the Financial

question 43

Multiple Choice

A limitation of the balance sheet in portraying the financial position of an entity is:

• A) items which cannot be measured in money are not included.
• B) there is no adjustment to values for inflation.
• C) the historical cost approach means that assets are not shown at their estimated market values.
• D) all of the above are limitations.

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Definitions:

Great Success

Achieving outstanding results or reaching a high level of accomplishment in a particular field or endeavor.

Presenting Bad-News Messages

The process of delivering unfavorable or negative news in a manner that attempts to minimize damage or maintain relationships.

Misleading the Reader

Presenting information in a way that could cause the reader to have a false understanding or impression.

Cushion the Negative Point

A communication technique involving the softening of potentially negative or unfavorable information to minimize its impact on the audience.