Book value is a(n) ________ measure, while market value is a(n) ________ measure.
A)inward-looking; outward-looking
B)more accurate; less accurate
C)forward-looking; backward-looking
D)backward-looking; forward-looking

Question

Quizplus · Accepted Answer

Book value is a backward-looking measure as it is based on historical cost and depreciation. It does not take into account the current market value of the assets. In contrast, market value is a forward-looking measure as it reflects the current value of the assets based on supply and demand in the market. It is more reflective of the true value of the company at present.

Book Value Is A(n) ________ Measure, While Market Value Is