Question

Which of the following statements about financial statements is most correct?                         a.     &nbsp

Which of the following statements about financial statements is most correct?

                        a.         Balance sheets are constructed using market (current) values for property and equipment.

                        b.         Under certain circumstances (for example, a difference between book depreciation and tax depreciation), the balance sheet may not balance; that is, total assets will not equal total liabilities plus total equity.

                        c.         The income statement reports on operations as of a given (single) date.

                        d.         Short-term securities investments (as opposed to long-term investments) have maturities of less than one accounting period (one year for annual statements).

                        e.         The balance sheet reports the status of an organization over some period, say one year.

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Answer #1

a)The given statement is incorrect as Balance sheets are constructed using market book values for property and equipment.

b)The given statement is incorrect as in case of balance sheet, only book depreciation is considered.

c)The given statement is incorrect the income statement reports on operations of an organisation over a some period, say one year.

d)The given statement is correct as classification is made on the basis of duration of holding.

e)The given statement is incorrect as balance sheet reports on organisation's assets and liabilities as of a given (single) date.

Thus correct answer is Option D

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