Which of the Following Is NOT One of the Three

question 17

Multiple Choice

Which of the following is NOT one of the three assumptions underlying value relevance literature?

• A)Share prices adequately represent investors' use of information in valuing equity securities.
• B)Accounting earnings are not highly associated with equity market value changes.
• C)Equity users are the dominant users of financial reports.
• D)Share-price-based tests can measure relevance and reliability as defined by accounting bodies.

---

Definitions:

Buyers

People or organizations that buy products or services for personal consumption, for reselling, or to use in manufacturing.

Tax

is a mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization to fund government spending and various public expenditures.

Sellers

People or organizations that make products or provide services available for purchase in the marketplace.

Tax Per Unit

A tax imposed on each unit of a good or service produced or sold, often used by governments to generate revenue or discourage consumption.