All of the Following Are Disadvantages of Fair Value Use

question 146

Multiple Choice

All of the following are disadvantages of fair value use except

• A)fair values may not be readily obtainable
• B)fair values may cause more fluctuations as change occurs from period to period
• C)comparability between companies may be impacted by different fair value measurement
• D)fair values only affect balance sheet accounts

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold.

Average Costs

The cost per unit is found by dividing the overall production cost by the quantity of units produced.

Market Price

The current price at which an asset or service can be bought or sold in the market.

Marginal Cost

The increase in total production costs resulting from the production of one additional unit of a product or service.