The Comparability Principle Applies Both to Comparing Businesses to One

question 3

True/False

The comparability principle applies both to comparing businesses to one another and to comparing different periods for the same business.

Recognize how direct labor hours and machine hours are used as allocation bases in different overhead costing methods.

Understand how departmental overhead rates are determined and used in cost allocation.

Understand the uncertainty and future projection aspects of financial statements.

Grasp the importance and limitations of financial statements in assessing a company's health and future prospects.