Asked by lauren campbell on Jul 17, 2024
Verified
Which of the following is a true statement?
A) Accounting income is generally equal to firm cash flow.
B) Accounting statements are usually prepared to match the timing of income and expenses.
C) The statement of financial position equity account represents the market value of the firm to shareholders.
D) The statement of financial position tells investors exactly what the firm is worth.
E) Assets are usually listed on the statement of financial position at market value.
Financial Position
A snapshot of the resources, obligations, and net worth of an entity at a specific point in time.
Market Value
The current price at which an asset or service can be bought or sold in an open and competitive marketplace.
- Acquire knowledge on the basics of financial statement formulation and their interconnectedness.
- Identify the differences between book values and market values, recognizing their relevance to financial managers.
Verified Answer
WR
William RoddyJul 24, 2024
Final Answer :
B
Explanation :
Accounting statements, including the income statement, are prepared on an accrual basis, meaning income and expenses are matched to the period they relate to, regardless of when cash transactions occur. This helps in understanding the financial performance of a company over a specific period.
Learning Objectives
- Acquire knowledge on the basics of financial statement formulation and their interconnectedness.
- Identify the differences between book values and market values, recognizing their relevance to financial managers.