Which of the Following Is NOT a Limitation Related to the Usage

question 34

Multiple Choice

Which of the following is NOT a limitation related to the usage of ratios when reviewing a firm's performance?

• A)Many firms experience seasonality in their operations.
• B)Ratios cannot be used to compare firms that are in the same industry if one firm's sales are higher than another firm's.
• C)Some firms operate in a variety of business lines,which makes it difficult to make comparisons.
• D)Accounting practices differ widely among firms.

Understand the use and limitations of categorical propositions in constructing arguments.

Understand the terminology used in logical statements, including connectives and statement variables.

Identify the symbols used for major logical connectives: conjunction, disjunction, negation, conditional, and biconditional.

Comprehend the structure and interpretation of basic logical connectives in statements.

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Definitions:

FASB

The Financial Accounting Standards Board, an organization responsible for establishing and improving financial accounting standards in the U.S.

IASB

Stands for the International Accounting Standards Board, which is an independent, private-sector body that develops and approves International Financial Reporting Standards (IFRSs).

Gross Method

An accounting practice where purchases are recorded at their gross price without deducting any cash discounts at the time of purchase.

Perpetual Inventory System

An accounting technique that utilizes computerized point-of-sale systems and enterprise asset management software to immediately record inventory transactions upon sale or purchase.