Because of the Historical Cost Principle, Fair Values May Not

question 100

True/False

Because of the historical cost principle, fair values may not be disclosed in the balance sheet.

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Definitions:

Stockholders' Equity

The residual assets of a company that belong to the shareholders after all liabilities have been deducted; also known as shareholders' equity.

Common Stock

Kind of corporate security that denotes equity ownership in a corporation, offering voting rights and a share in the company's profits through dividends.

Consolidated Statement

Financial statements that represent the combined financial results of a parent company and its subsidiaries.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity.