Which of the following statements is not consistent with generally accepted accounting principles relating to asset valuation?
A) Many assets are originally recorded in accounting records at their cost to the business entity.
B) Subtracting total liabilities from total assets indicates what the owner's equity in the business is worth under current market conditions.
C) Accountants assume that assets such as office supplies, land, and buildings will be used in business operations, rather than being sold at current market prices.
D) Accountants prefer to base the valuation of assets upon objective, verifiable evidence rather than upon appraisals or personal opinion.

Question

Quizplus · Accepted Answer

Generally accepted accounting principles do not state that subtracting total liabilities from total assets indicates what the owner's equity in the business is worth under current market conditions. This statement may be misleading as it does not take into account any changes in asset values since their original recording in the accounting records. Instead, the owner's equity should be calculated based on the historical cost of assets and any subsequent changes in value should be separately reported in the financial statements.

Which of the Following Statements Is Not Consistent with Generally