The major disadvantages of market-value accounting include:
A) the difficulty in estimating the current value for some assets.
B) the difficulty in applying some of the valuation models used to estimate market values.
C) the resulting numbers are potentially open to abuse.
D) All of the above are disadvantages of market-value accounting.

Question

Quizplus · Accepted Answer

All of the given options are valid disadvantages of market-value accounting. Estimating current values for certain assets can be difficult due to lack of data or volatility in the market, and applying valuation models can be complex. Additionally, the resulting numbers can be manipulated or abused, especially since market values are subjective and can fluctuate rapidly.

The Major Disadvantages of Market-Value Accounting Include