Which of the Following Is $\underline{not}$ A True Statement?
A)There Is Empirical Evidence That Future Cash

question 37

Multiple Choice

Which of the following is $\underline{not}$ a true statement?

• A)There is empirical evidence that future cash flows are better forecasted with accrual data than with cash flow data.
• B)Accrual accounting numbers incorporate the attribute that determines firm valuation-net cash flow data.
• C)Changes in reported accounting earnings affect firm valuation through changes in stock prices.
• D)The value to investors of the information in financial reporting lies in its role as an historical record.

---

Definitions:

Marketable Securities

Financial instruments that can be easily converted into cash because they have high liquidity and short maturities.

Financial Leverage

Employing the use of debt to boost the prospective profits of an investment, which in turn escalates the risk of experiencing a loss.

Debt-To-Equity Ratio

The ratio portraying the financial interplay between shareholder equity and debt in the capital structure for assets.

Net New Bonds

The total value of newly issued bonds minus the bonds that have matured or been bought back by the issuer within a specific period.