Which of the Following Is Not a Use of Accounting

question 26

Multiple Choice

Which of the following is not a use of accounting information?

• A)It helps uses make decisions relating to the business.
• B)It reduces uncertainty about the business's financial position.
• C)It helps answer questions about availability of funds to meet the business's obligations.
• D)It can accurately predict future profits.

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Definitions:

FVE Method

FVE Method, or Fair Value Estimation Method, involves estimating the fair value of an asset or liability, taking into account market conditions and other influencing factors.

Equity Method

An accounting technique used when a company invests in another company and has significant influence, typically reflected by owning 20% to 50% of the voting stock, whereby the investment is initially recorded at cost and subsequently adjusted for the investing company's share of the investee's net profits or losses.

Investment in Humble

A financial stake in the company Humble, potentially involving the purchase of shares or other assets to gain a financial return.

FVE Method

An accounting technique where assets and liabilities are valued and reported at their fair value for financial reporting purposes.