Which of the Following Statements Identify Problems with Financial Statement

question 3

Multiple Choice

Which of the following statements identify problems with financial statement analysis?
I: It is not always easy to identify a suitable benchmark for comparison purposes.
II: As many firms are conglomerates owning more than one line of business it is sometimes difficult to identify groups of firms that are directly comparable.
III: Firms in the same industry operate globally and comparison may be difficult due to different accounting standards used in the preparation of financial statements.
IV: Unusual events may affect financial performance which may give misleading signals when comparing firms' results.

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

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