Which Measurement System Would Seem Most Relevant to Creditors

question 10

Multiple Choice

Which measurement system would seem most relevant to creditors?

• A) Historic cost
• B) Fair value
• C) Current cost
• D) Deprival value

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Definitions:

Net Loss

A situation in which a company's expenses exceed its revenues, resulting in a negative income for the accounting period.

Expenses

Costs necessary for maintaining the daily operations of a business, contributing to the revenue generation indirectly.

Revenue

The total income earned by a company for selling its goods, services, or other rights to use assets.

Owner Investment

Capital or assets contributed by the owner(s) of a company into the business, increasing the company's equity.