When making ﬁnancial decisions related to assets, you should:
A)always consider market values.
B)place more emphasis on book values than on market values.
C)rely primarily on the value of assets as shown on the statement of ﬁnancial position.
D)place primary emphasis on historical costs.
E)only consider market values if they are less than book values.

Question

Quizplus · Accepted Answer

Market values are a more accurate reflection of the current value of an asset, and should be considered when making financial decisions related to assets. Book values only show the historical cost of the asset and may not reflect changes in market conditions or the asset's actual value. The statement of financial position may not provide an accurate reflection of an asset's current value. Historical costs are not relevant when considering current financial decisions. Market values should be considered regardless of whether they are greater or less than book values.

When Making ﬁNancial Decisions Related to Assets, You Should