A limitation of the balance sheet that is not also a limitation of the income statement is
A) the use of judgments and estimates
B) omitted items
C) the numbers are affected by the accounting methods employed
D) valuation of items at historical cost

Question

Quizplus · Accepted Answer

Valuation of items at historical cost is a limitation of the balance sheet that is not also a limitation of the income statement. The income statement does not include information about the historical cost of assets or liabilities, as it presents information about revenues, expenses, gains, and losses over a period of time. The use of judgments and estimates, omitted items, and the impact of accounting methods are limitations of both the balance sheet and income statement.

A Limitation of the Balance Sheet That Is Not Also