Which of the Following Is Not a True Statement

question 32

Multiple Choice

Which of the following is not a true statement?

• A)When choosing an investment, it is not necessary to consider the risk factor.
• B)During inflationary times, there is a risk that the financial return on an investment will not keep pace with the rate of inflation.
• C)The interest rate risk associated with investments in bonds is the result of changes in the interest rates in the economy.
• D)The risk of business failure is associated with investments in common stock, preferred stock, and corporate bonds.
• E)The price of stocks, bonds, and other investments may fluctuate because of the behavior of investors in the marketplace.

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Definitions:

Depreciation Expense

Segmenting the cost related to a physical asset through its active life.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, representing how much of the asset's value has been used up.

Balances

The figures that represent the difference between the sum of debits and credits in an account.

Expense Recognition

The accounting principle that expenses are recorded and reported in the same period as the revenues they help to generate, ensuring accurate financial statements.