All of the Following Are Disadvantages of Fair Value Use

question 15

Multiple Choice

All of the following are disadvantages of fair value use except:

• A) fair values may not be readily obtainable.
• B) fair values may cause more fluctuations as change occurs from period to period.
• C) comparability between companies may be impacted by different fair value measurement.
• D) fair values can only be used on balance sheet accounts.

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Definitions:

Units

Basic quantities or measurements used as standards for expressing and comparing the quantity of physical properties.

Tax

Tax refers to a compulsory financial charge or some other type of levy imposed upon a taxpayer by a government organization in order to fund government spending and various public expenditures.

Good

An item or product that satisfies a want or need and can be transferred to others.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing their gain from the transaction.