Which of the following statements is false concerning the use of accounting data versus market value data?
A) The primary reason for using accounting data is the lack of readily available market value information.
B) Whenever market value information is available, it should be used instead of accounting data.
C) If market value and accounting data conflict, the accounting data should be given precedence.
D) If a firm has only current assets and current liabilities, book values will likely be reasonable approximations of market values.
E) Little direct market value information exists for privately held and not-for-profit businesses.

Question

Quizplus · Accepted Answer

Accounting data and market value data serve different purposes, and market value is often considered more relevant for decision-making purposes because it reflects the current value of an asset or liability in the market. Therefore, if there is a conflict between market value and accounting data, market value is generally given precedence, especially in contexts where current valuation is crucial, such as investment analysis or financial reporting under certain standards that require fair value measurements.

Which of the Following Statements Is False Concerning the Use