Which One of the Following Statements Concerning Market and Book

question 68

Multiple Choice

Which one of the following statements concerning market and book values is correct?

• A)The market value of accounts receivable is generally higher than the book value of those receivables.
• B)The market value tends to provide a better guide to the actual worth of an asset than does the book value.
• C)The market value of fixed assets will always exceed the book value of those assets.
• D)Book values represent the amount of cash that will be received if an asset is sold.
• E)The current book value of equipment purchased last year is equal to the initial cost of the equipment.

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Definitions:

Silent Partner

An investor in a partnership who contributes capital but does not take part in the management or daily operations of the business.

Day-To-Day Operations

Involves the regular, routine activities necessary for a business or organization to function efficiently.

Partnership Debts

Financial obligations that are the responsibility of a business partnership, to be repaid from the partnership's assets.

Ratification

The act of officially approving or confirming an action or decision, usually after the fact, which might not have been initially authoritative or agreed upon.