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Homework answers / question archive / QUESTION 10 Which of the following is a limitation of an entity's balance sheet? the balance sheet is a historical representation of an entity's financial position and does not consider future growth potential if the business is cyclical, the balance sheet prepared at the end of the financial period may not be representative of the financial position at other times during the financial period the balance sheet may not include all items that create value for the entity all of the options listed are considered limitations of an entity's balance sheet 1 points Save Answer
QUESTION 10 Which of the following is a limitation of an entity's balance sheet? the balance sheet is a historical representation of an entity's financial position and does not consider future growth potential if the business is cyclical, the balance sheet prepared at the end of the financial period may not be representative of the financial position at other times during the financial period the balance sheet may not include all items that create value for the entity all of the options listed are considered limitations of an entity's balance sheet 1 points Save Answer
The only correct option is (A)the balance sheet is historical representation of entity's financial position and it does not consider the future growth potential.balance sheet are generally based upon historical cost and it does not provide for futuristic estimate.
All the other options are false as balance sheet will be including part of otherr periods during the financial period and it will also consider all such item that create value in form of asset.
Correct answer is option (A)balance sheet is a historical representation of the financial position of an entity and it does not consider Future growth potential.
