Which of the following statements is true regarding valuation amounts on the balance sheet?
A)Stockholders' equity reflects the amount the stockholders would receive upon liquidation.
B)Assets are recorded at current cost.
C)Stockholders' equity reflects the current market value of the stock
D)A variety of assumptions are used in determining amounts reported on the balance sheet.

Question

Quizplus · Accepted Answer

A variety of assumptions are used in determining the amounts reported on the balance sheet. The valuation amounts of assets may be based on historical cost, current cost, or fair value. Stockholders' equity reflects the residual interest in the assets of an entity after deducting liabilities, but it does not necessarily reflect the current market value of the stock.

Which of the Following Statements Is True Regarding Valuation Amounts