Which one of the following statements is correct?
A)Book values should always be given precedence over market values.
B)Financial statements are frequently used as the basis for performance evaluations.
C)Historical information provides no value to someone who is predicting future performance.
D)Potential lenders place little value on financial statement information.
E)Reviewing financial information over time has very limited value.

Question

Quizplus · Accepted Answer

Financial statements are a commonly used tool to evaluate the performance of a company. They provide valuable information on financial health, profitability, and efficiency, among others. Therefore, financial statements are often used as a basis for making decisions and conducting various types of analysis. Choices A, C, D, and E are incorrect because they either contradict common practice or are not accurate statements.

Which One of the Following Statements Is Correct