Which of the Following Statements About Fair Value Is True

question 17

Multiple Choice

Which of the following statements about fair value is true?

• A) Level 1 inputs should be used to determine fair value only when Level 2 and Level 3 inputs are not available.
• B) Level 3 inputs are observable market prices for similar assets in active markets.
• C) Fair value accounting is also known as "mark-to-market" accounting.
• D) Fair value is a measure of market-based entry value.

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Definitions:

Proximity

The state of being close or near in space, time, or relationship.

Small Business Owner's Product

A product or service that is offered by an entrepreneur owning and running a small-scale business.

Breakeven Point

The level of production or number of sales at which costs equal revenues, resulting in neither profit nor loss.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.