The statement of financial position
A) Omits many items that are of financial value.
B) Makes very limited use of judgments and estimates.
C) Uses fair value for most assets and liabilities.
D) All of the choices are correct regarding the statement of financial position.

Question

Quizplus · Accepted Answer

The statement of financial position (balance sheet) often omits items that may have significant financial value but are difficult to quantify or value objectively, such as the value of a company's brand or its intellectual property, unless they have been acquired. Choices B and C are incorrect because the preparation of financial statements, including the statement of financial position, frequently involves the use of judgments and estimates (contrary to B), and not all assets and liabilities are measured at fair value (contrary to C).

The Statement of Financial Position