Which of the Following Best Describes Why the Valuation Principle

question 41

Multiple Choice

Which of the following best describes why the Valuation Principle is a key concept in making financial decisions?

• A)It shows how to assign monetary value to intangibles such as good health and well-being.
• B)It allows fixed assets and liquid assets to be valued correctly.
• C)It gives a good indication of the net worth of a person,item,or company and can be used to estimate any changes in that net worth.
• D)It shows how to make the costs and benefits of a decision comparable so that we can weigh them properly.
• E)It allows us to produce accurate financial statements.

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Definitions:

Commercial Paper

Unsecured promissory notes with a fixed maturity of usually less than 270 days, used extensively in the financing of business operations.

UCC

The Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, including sales, leases, negotiable instruments, and secured transactions.

Confession of Judgment

An agreement where a debtor allows a creditor to obtain a judgment against them without a trial.

Power of Attorney

A legal document authorizing one person to act on behalf of another in legal or financial matters.