Which One of the Following Statements Is Correct

question 87

Multiple Choice

Which one of the following statements is correct?

• A) Book values should always be given precedence over market values.
• B) Financial statements are rarely used as the basis for performance evaluations.
• C) Historical information is useful when projecting a company's future performance.
• D) Potential lenders place little value on financial statement information.
• E) Reviewing financial information over time has very limited value.

---

Definitions:

Cash Fund

A cash fund is a reserve of liquid money that a business or individual keeps on hand for meeting short-term obligations or emergencies.

Depreciated

Depreciation is the process of allocating the cost of a tangible asset over its useful life, reflecting the asset's wear and tear, deterioration, or obsolescence.

Operating Lease

A contract that allows for the use of an asset but does not convey rights of ownership of the asset, with payments made over a shorter period than the asset's useful life.

Lease Obligation

A financial commitment that represents the future payments an entity is obligated to make under lease agreements.