Why Can't a Business' Statement of Financial Position Be Used

question 104

Multiple Choice

Why can't a business' statement of financial position be used to accurately predict what the business might be sold for?

• A)it identifies all the revenues and expenses of the business.
• B)assets are generally listed on the statement of financial position at their historical cost,not their current value.
• C)it gives the results of operations for the current period.
• D)some of the assets and liabilities on the statement of financial position may actually be those of another entity.

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Definitions:

Corporate Social Responsibility

The practice of companies taking responsibility for their impact on society and the environment, beyond legal and economic requirements.

Clean Air Law

Refers to legislation aimed at reducing air pollution to protect environmental and human health.

Noncompliance

The failure or refusal to act in accordance with laws, regulations, or prescribed standards, often leading to legal penalties or other consequences.

Social Responsibility Strategy

A plan of action for how a company will operate ethically, sustainably, and contribute positively to society and the environment.