Which of the Following Is a Difference Between Internal Comparison

question 10

Multiple Choice

Which of the following is a difference between internal comparison and external comparison with regard to financial statement analysis?

• A) An internal comparison reveals unexpected relationships within a company, whereas an external comparison reveals the absence of expected relationships outside a company.
• B) An internal comparison involves comparing a company with the industry as a whole, whereas an external comparison involves comparing a company's current performance with its past experience.
• C) An internal comparison is done by an accountant or auditor, whereas an external comparison is done by a forensic accountant.
• D) An internal comparison allows the examination of changes within a company over time, whereas an external comparison reveals the company's relative performance and financial standing.

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Definitions:

Issued

The act of officially distributing or making something available, such as a public statement, document, currency, or security.

MBCA

Model Business Corporation Act, a template for state corporation statutes that provides legal guidelines for corporate governance and operations.

Articles of Incorporation

Legal documents filed with the state government to legally establish a corporation.

Proper Consideration

The requirement in contract law that something of value must be exchanged between the parties to form a valid contract.