Which of the Following Is a Disadvantage to Using Fair

question 85

Multiple Choice

Which of the following is a disadvantage to using fair value to account for financial assets?

• A) GAAP requires fair values to be determined at the date the assets were bought, so different assets are evaluated at different dates.
• B) Fair value is never relevant information.
• C) Because there are not perfect markets for some assets, fair value may require some judgmental estimates.
• D) Fair value accounting ignores holding gains and losses.

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Definitions:

Throughput Time

The amount of time taken for a product to pass through all stages of production from start to finish, including processing time, wait time, and move time.

Manufacturing Cycle Efficiency

A metric that measures the efficiency of the manufacturing process, calculated as the value-added time divided by the total cycle time.

Non-Value-Added

Activities or processes that do not add value to the product or service from the customer's perspective, leading to unnecessary costs.

Delivery Cycle Time

The total time taken from when a customer order is placed until the order is delivered, including all processing, manufacturing, and shipping times.