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Part $1$

Select the three primary disadvantages of the statement of financial position.$($Select all that$$ apply.$)$

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Part $1$

A$.$

$$Many$,$ if not$$ most, of the accounts on the balance sheet are reported at historical$$ cost$,$ as opposed to market values or liquidation values.$$ Thus, the relevance of the statement is questioned.

B$.$

The balance$$ sheet, in conjunction with the income$$ statement, is useful in assessing the rate of return that an entity is generating on its investments.

C$.$

Many of the accounts reported on the balance sheet are based on estimates as opposed to determinable amounts.

D$.$

The balance sheet summarizes the economic resources and obligations that impact the$$ entity's ability to generate future cash flows.

E$.$

The balance sheet aids in assessment of the riskiness of the entity in that it can be used to measure$$ liquidity, solvency, and financial flexibility.

F$.$

There are a number of assets and liabilities that are not reported on the balance sheet.