Question

In: Accounting

A limitation of the balance sheet that is not also a limitation of the income statement...

A limitation of the balance sheet that is not also a limitation of the income statement is

  • A. the use of judgments and estimates

  • B. omitted items

  • C. the numbers are affected by the accounting methods employed

  • D. valuation of items at historical cost

Solutions

Expert Solution

Ans: D.valuation of items at historical cost

Historical cost :-A historical cost is a measure of value used in accounting in which the price of an asset on the balance sheet is based on its nominal or original cost when acquired by the company. The historical-cost method is used for assets in the United States under generally accepted accounting principles (GAAP).

Reason:- Income statement is prepared on accrual basis.

In balance sheet we record at historical cost.Therefore states that it's a limitation to balance sheet not for Income statement

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Income Statement and Classified Balance sheet
    Harvey Specter started his own firm, Specter Co. on .July I, 2011. The list of different Account titles with respective balance  (each account has a normal balance) at September 30, 20l3 as follows                                        Specter Co.                                            List or Accounls                                                              ...
Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance...
Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance sheet of Whole Foods Market Inc. WHOLE FOODS MARKET INC. Consolidated Statement of Operations Fiscal Years Ended (in millions) Sept 25, 2016 Sept 27, 2015 Sales $15,724 $15,389 Cost of goods sold and occupancy costs 10,313 9,973 Gross profit 5,411 5,416 Selling, general and administrative expenses 4,477 4,472 Pre-opening expenses 64 67 Relocation, store closures and lease termination costs 13 16 Operating income 857...
Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance...
Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance sheet of Whole Foods Market Inc. WHOLE FOODS MARKET INC. Consolidated Statement of Operations Fiscal Years Ended (in millions) Sept 25, 2016 Sept 27, 2015 Sales $15,724 $15,389 Cost of goods sold and occupancy costs 10,313 9,973 Gross profit 5,411 5,416 Selling, general and administrative expenses 4,477 4,472 Pre-opening expenses 64 67 Relocation, store closures and lease termination costs 13 16 Operating income 857...
1. Which of the following is a limitation of the balance sheet?
 1. Which of the following is a limitation of the balance sheet? A) Many items that are of financial value are omitted. B) Judgments and estimates are used. C) Current fair value is not reported. D) All of these answer choices are correct. 2. The correct order to present current assets is A) cash, accounts receivable, prepaid items, inventories. B) cash, accounts receivable, inventories, prepaid items. C) cash, inventories, accounts receivable, prepaid items. D) cash, inventories, prepaid items, accounts receivable. 3. The current assets section of the balance sheet should include A)...
(b) Discuss the purpose and limitation of a balance sheet.
(b) Discuss the purpose and limitation of a balance sheet.
Cash Budget, Income Statement and Balance Sheet
The following information is available in the question attached:
Create a Fictitious balance sheet and income statement.
Create a Fictitious balance sheet and income statement.
The balance sheet and income statement shown below are for Byrd Inc. BALANCE SHEET Cash $...
The balance sheet and income statement shown below are for Byrd Inc. BALANCE SHEET Cash $ 140.0 Accounts payable $800.0 Accts. Receivable 880.0 Notes payable ` 600.0 Inventories 1,320.0 Accruals 400.0 Total current assets 2,340.0 Total current liabilities 1,800.0 Long-term bonds 1,000.0 Total debt 2,800.0 Common stock 200.0 (50,000 shares) Retained earnings 1,000.0 Net plant & equip 1,660.0 Total common equity 1,200.0 Total assets $4,000.0 Total liabilities & equity $4,000.0 INCOME STATEMENT Net sales $6,000.0 Operating costs 5,599.8 Depreciation 100.2...
4) Using the balance sheet from #3, construct an income statement and balance sheet for     ...
4) Using the balance sheet from #3, construct an income statement and balance sheet for      the first month of operation, given the following information:     Sales $104,000.00 Collections $77,000.00 Purchases (paid for half) $60,000.00 Ending inventory $57,000.00 Equipment Depreciation $18,000.00 Vehicle Depreciation $2,000.00 Heat (due next month) $450.00 Electricity $325.00 Telephone $230.00 Advertising $1,200.00 Salaries $15,500.00 Payroll Tax Expense $1,700.00 Office Supplies $200.00 Insurance (due next month) $1,250.00 Loan payment $3,500.00     principal $1,500.00     interest $2,000.00 Legal fees...
From the Income Statement, Balance Sheet, and Statement of Changes in Owners’ Equity, and Statement of...
From the Income Statement, Balance Sheet, and Statement of Changes in Owners’ Equity, and Statement of Cash flows for 2017 (you prepared in Tandy #1). Calculate (and show your work) for the following Earnings per Share (EPS) Dividends per share (DPS) Book Value per Share Net Operating Profit after Tax   (NOPAT)          EBIT (1 - Tax rate) Net Operating Working Capital  (NOWC)          Current assets – (Current liabilities – Notes Payable Net Plant and Equipment  (NFA)           Operating Capital  (OC)          NOWC + NFA             Net Cash Flow  (NCF)...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT