Which of the following statements is true about the values recorded in the balance sheet of a firm?
A. The book value of a firm's assets will be equal to the market value of the firm's assets.
B. The equity section of a firm's balance sheet represents the difference between the market value of the firm's assets and the book value of the firm's liabilities.
C. The equity section of a firm's balance sheet represents the difference between the market value of the firm's assets and the market value of the firm's liabilities.
D. The book value of a firm's assets will be higher than the market value of the firm's assets.
E. The book value of a firm's debt generally is equal to or very close to the market value of the firm's liabilities.
Answer: E
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