One Commonly Cited Weakness of Consolidated Financial Statements Is That

question 91

Multiple Choice

One commonly cited weakness of consolidated financial statements is that:

• A)they lack completeness.
• B)they are of little use to end-users.
• C)different accounting practices between parent and its subsidiary may often yield misleading results.
• D)a poor performance by one or more subsidiaries can be hidden through the aggregation process.

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Definitions:

Face Value

The nominal value of a security stated by the issuer, usually representing the amount to be repaid at maturity for bonds.

Times Interest Earned Ratio

A metric used to measure a company's ability to meet its debt obligations by comparing its interest expenses to its earnings before interest and taxes.

Debt

An amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, often with interest.

Investment

The action or process of investing money for profit or material result.