The Major Limitation of Financial Statements Is

question 101

Multiple Choice

The major limitation of financial statements is

• A) in their complexity.
• B) in their lack of comparability.
• C) in their use of historical cost accounting.
• D) in their lack of detail.

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Definitions:

Present Intent

The current intention or determination to engage in a particular action or effect a legal consequence.

Subjective Standard

A legal standard that is based on personal feelings, tastes, or opinions, making it subject to individual judgment rather than objective observation.

Silent Acceptance

An implied agreement to a proposal demonstrated through an individual's actions rather than explicitly expressed consent.

Common Law

Law that is derived from court decisions over time, rather than statutes or written laws enacted by a legislative body.