For which of the following statement of financial position items will the book value and market value most likely be closest at the time the statement of financial position is prepared?

A) Net fixed assets.
B) Common stock.
C) Accounts receivable.
D) Long-term debt.
E) Retained earnings.

Question

Anthony Maldonado · Accepted Answer

Final Answer : C, Explanation :  Accounts receivable are short-term assets that are expected to be converted into cash within a short period, typically one year or less. The book value of accounts receivable, which is the amount recorded on the statement of financial position, is expected to be very close to the market value, as it reflects the cash amount the company expects to receive. Other options like net fixed assets, common stock, long-term debt, and retained earnings are more likely to have differences between their book values and market values due to various factors such as depreciation, market conditions, and changes in interest rates.

For which of the following statement of financial position items will the book value and market value most likely be closest at the time the statement of financial position is prepared?

A) Net fixed assets.
B) Common stock.
C) Accounts receivable.
D) Long-term debt.
E) Retained earnings.

Definitions

Learning Objectives

Learning Objectives

Related questions

For which of the following statement of financial position items will the book value and market value most likely be closest at the time the statement of financial position is prepared?A) Net fixed assets.B) Common stock.C) Accounts receivable.D) Long-term debt.E) Retained earnings.

Definitions

Learning Objectives

Learning Objectives

Related questions

For which of the following statement of financial position items will the book value and market value most likely be closest at the time the statement of financial position is prepared?

A) Net fixed assets.
B) Common stock.
C) Accounts receivable.
D) Long-term debt.
E) Retained earnings.