Which of the Following Is the Most Serious Limitation to Financial

question 42

Multiple Choice

Which of the following is the most serious limitation to financial statement analysis of publicly traded companies?

• A)Some companies do not use GAAP.
• B)Inflation can distort comparisons between years.
• C)Some companies report nonoperating items such as extraordinary gains and losses,while others do not.
• D)Different industries use different account names.

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Definitions:

Airspace

The space above the earth's surface that is available for aircraft to fly through, often regulated by a sovereign entity.

Valid Deed

A legal instrument that transfers ownership of real property from one person to another, which must meet certain requirements such as being in writing, having a clear description of the property, and being properly executed and delivered.

Intent to Convey

The legal determination or declaration of a party's intention to transfer rights, property, or interest from one to another.

Soil

The top layer of the Earth's surface, consisting of rock and mineral particles mixed with organic matter, which supports plant life.