Which of the Following, If True, Would Weaken the Case

question 29

Multiple Choice

Which of the following, if True, would weaken the case that more than one type of financial statement should be examined in order to determine a company's financial health?

• A) Nowadays many companies burnish their balance sheet by claiming inflated figures for goodwill.
• B) An income statement from one year may be radically different from the one for the previous year.
• C) It can be difficult for auditors to independently verify certain figures in income statements.
• D) The management by data trend has led companies to consider as imperative detailed and accurate financial statements.
• E) In times of recession, companies often reduce their accounting and financial management staffs.

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Definitions:

AASB 101

An accounting standard that specifies the requirements for the presentation of financial statements, ensuring their comparability both with the entity's financial statements of previous periods and with those of other entities.

Annually

Occurring once every year or relating to a period of one year.

Financial Statements

Official records that detail the financial activities and condition of a business, government, or other entity.

Interest Revenue

Income earned by an entity from its investments that pay interest, such as bonds, savings accounts, or loans extended to others.