Which of the following statements is true?
A) The value of a company is likely to be very different from the total net value of the individual assets and liabilities reported on the statement of financial position
B) The value of a company is identical to the total net value of the individual assets and liabilities reported on the statement of financial position
C) The value of a company is identical to retained earnings, as reported on the statement of financial position
D) The value of a company is equal to current assets, less current liabilities

Question

Quizplus · Accepted Answer

The value of a company includes not only the tangible assets and liabilities reported on the statement of financial position, but also intangible assets, such as brand value or intellectual property, that may not be reflected in the financial statements. Additionally, market factors, such as supply and demand or investor sentiment, can affect the value of a company, even if its financial statements show a different amount. Therefore, the value of a company is likely to be different from the total net value of individual assets and liabilities reported on the statement of financial position.

Which of the Following Statements Is True