Which of the Following Represent Problems Encountered When Comparing the Financial

question 115

Multiple Choice

Which of the following represent problems encountered when comparing the financial statements of one firm with those of another firm?
I. Either one,or both,of the firms may be conglomerates and thus have unrelated lines of business.
II. The operations of the two firms may vary geographically.
III. The firms may use differing accounting methods for inventory purposes.
IV. The two firms may be seasonal in nature and have different fiscal year ends.

• A) I and II only
• B) II and III only
• C) I, III, and IV only
• D) I, II, and III only
• E) I, II, III, and IV

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Definitions:

Contiguity

The principle stating that events occurring close together in time or space are readily associated with each other.

Unconditioned Stimulus

In the process of classical conditioning, a stimulus instinctively and effortlessly elicits a reaction without the need for any previous learning.

Reliable Indicator

A metric or sign that consistently and accurately measures or predicts a specific outcome or condition.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, now elicits a response.