A Limitation of Using Past Performance as a Basis for Judging

question 175

Multiple Choice

A limitation of using past performance as a basis for judging actual results is that ________.

• A) future conditions can be different from the past
• B) any undervaluation of profits in the past period is likely to continue
• C) any subsequent change in accounting treatment will distort performance evaluation
• D) they tend to distort results when current and past conditions are similar

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Definitions:

Ethoxycyclopentane

An organic compound featuring an ethoxy group attached to a cyclopentane ring.

Intermolecular Dehydration

A chemical reaction where water is removed from between two molecules, often leading to the formation of a larger molecule.

Hexan-1-ol

An organic alcohol with a six-carbon chain, where the hydroxyl (-OH) group is attached to the first carbon, commonly used in perfumes and flavorings.

Di-n-Hexyl Ether

An organic compound formed by the dehydration of hexanol, resulting in an ether linkage between two hexyl groups.