A valuation method that is more realistic than the balance sheet because it adjusts book value to reflect actual market value is the:
A)excess-earnings method.
B)market approach.
C)capitalization method.
D)adjusted balance sheet method.

Question

Quizplus · Accepted Answer

The adjusted balance sheet method is a valuation method that adjusts book value to reflect actual market value by adding or subtracting specific assets and liabilities from the balance sheet. It considers the fair market value of these assets and liabilities rather than relying solely on their book value. This method is more accurate than the balance sheet because it provides a more realistic assessment of the actual value of the company.

A Valuation Method That Is More Realistic Than the Balance