Balance sheet items are carried at cost,a good indicator of fair market value in valuing a company.

Question

Quizplus · Accepted Answer

Balance sheet items are not necessarily carried at fair market value. Many assets are carried at historical cost, which may not reflect their current fair market value. Similarly, liabilities are carried at their outstanding balance, which may not reflect their current fair market value. Therefore, balance sheet items may not be a reliable indicator of a company's fair market value.

Balance Sheet Items Are Carried at Cost,a Good Indicator of Fair