Which of the Following Is a Limitation of the Balance

question 102

Multiple Choice

Which of the following is a limitation of the balance sheet?

• A) Many items are omitted.
• B) Judgment must be used.
• C) Current values are not reflected.
• D) All of these answers are correct

---

Definitions:

Asset Values

The monetary worth placed on assets, considering factors such as market value, cost, and depreciation.

Capitalized

The process of recording a cost or expense on the balance sheet for the purposes of delaying full recognition of the expense over time through depreciation or amortization.

Interest Capitalization

The process of adding unpaid interest to the principal balance of a loan, thereby increasing the total amount owed.

Capital Expenditures

Capital allocated by a corporation to purchase, improve, and manage tangible assets like land, factories, or machinery.