It Is Easier to Evaluate a Firm Using Its Financial

question 63

Multiple Choice

It is easier to evaluate a firm using its financial statements when the firm:

• A)is a conglomerate.
• B)is global in nature.
• C)uses the same accounting procedures as other firms in its industry.
• D)has a different fiscal year than other firms in its industry.
• E)tends to have one-time events such as asset sales and property acquisitions.

---

Definitions:

Cost Variance

The differences between actual and standard costs.

Standard Cost

A detailed estimate of what a product should cost.

Actual Cost

The actual amount spent on goods, services, or other expenses, as opposed to budgeted or standard costs, including all direct and indirect costs.

Principle of Exceptions

A management principle focusing on identifying and addressing areas that significantly deviate from the norm or expected results, often utilizing reporting and analysis.