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How many statements in the following sentence are correct regarding the balance sheet?


- One cannot determine the true fair market value of a company by reviewing its balance sheet.
- Certain internally generated assets, such as trademark, are not reported on a company's balance sheet.
- A balance sheet shows only the ending balances, in a summarized format, of all balance sheet accounts in the accounting system as of a particular date.

a. 0 b. 1 c. 2 d. 3

I know the second statement is incorrect, but I'm not sure about the other two! HELP!

538 day(s) ago

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brandonm 		All are true.
A- you would have to take into account the profitability of a company to really get a fair market value (this is an extensive review really).
B- Good will or a good name or the company trademark would have a negotiated value at the time a business sold - but no paper value unless the fees to file for the trademark were recorded as an asset - and that would be foolish.
C- Yep - just a snapshot. However the profit or loss figure does have an impact (but I don't think this is a trick question).

Posted 538 days ago

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