Financial information is relevant for all of the following reasons except:
A)for making predictions about the future cash flows
B)for making comparisons with industry data.
C)to determine the liquidation values of capital assets
D)for confirming or correcting past evaluations.

Question

Quizplus · Accepted Answer

Financial information is not relevant to determine the liquidation values of capital assets as liquidation values are determined by market conditions and not by financial statements. Financial information is, however, relevant for making predictions about the future cash flows, making comparisons with industry data, and confirming or correcting past evaluations.

Financial Information Is Relevant for All of the Following Reasons