One Criticism Not Normally Aimed at a Statement of Financial

question 52

Multiple Choice

One criticism not normally aimed at a statement of financial position prepared using current accounting and reporting standards is

• A)failure to reflect current value information.
• B)the extensive use of separate classifications.
• C)an extensive use of estimates.
• D)failure to include items of financial value that cannot be recorded objectively.

---

Definitions:

GAAP

A set of widely adhered to accounting norms and standards that guide financial reporting, known as Generally Accepted Accounting Principles.

Fair Value

An estimate of the market value of an asset or liability based on current market prices or valuations.

Trading Securities

Financial assets that a company holds primarily for the purpose of selling them in the short term to profit from market price changes.

Unrealized Gains

Increases in the value of assets that have not yet been sold and therefore not turned into cash.