Which of the following statements is false ? select the false from below options
Correct answer: D. Assets are to be shown in the Balance Sheet at the realizable value
- A. Balance Sheet discloses financial position of the business
- B. A person who owes to the business is called Debtor
- C. Decrease in the value of the asset could decrease the value of a liability
- D. Assets are to be shown in the Balance Sheet at the realizable value
Explanation
Under the usual historical-cost convention, assets are recorded at cost less applicable depreciation, not at their realizable value. The other statements correctly describe debtors, financial position and the possible effect of asset changes on liabilities.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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