Which of the Following Is NOT a Limitation of Measurement

question 11

Multiple Choice

Which of the following is NOT a limitation of measurement in accounting?

• A)It is impossible to compare entities over a period of time.
• B)There is little agreement on what measurement methods should be used.
• C)Measurement can be quite subjective.
• D)There are some accounting items that are not easily measured.

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Definitions:

Financial Ratios

Indicators derived from financial statements that are used to evaluate a company's financial health and operational efficiency.

Empirical Measure

A method or metric based on observation and experience rather than theory or pure logic.

Bottom-Up Planning

A planning approach where strategies and goals are defined at lower levels of the organization before being aggregated to define overall corporate strategies.

Top-Down Planning

Business planning based on a set of goals forced on the organization by senior management. Top-down planning has a tendency to lead to excessively optimistic plans.