Which of the following statements is false?
A)A critical problem is associated with using present value on the financial statements is that it requires that both future cash flows and future interest rates be predicted.
B)In most cases, predicting the future cash flows associated with a particular asset or liability with a reasonable degree of confidence is almost impossible.
C)The predictions that management must make to apply present value are not too subjective for financial statements that are to be used by those outside the company.
D)Auditors are unwilling and unable to verify subjective present value judgments.

Question

Quizplus · Accepted Answer

The statement that "the predictions that management must make to apply present value are not too subjective for financial statements that are to be used by those outside the company" is false. In reality, the predictions that management must make to use present value can be highly subjective and can vary significantly between different individuals or organizations. This subjectivity can impact the accuracy and reliability of the financial statements, which is why auditors may be reluctant or unable to verify present value judgments.

Which of the Following Statements Is False