One Commonly Cited Weakness of Consolidated Financial Statements Is That

question 29

Multiple Choice

One commonly cited weakness of Consolidated Financial Statements is that:

• A)they lack completeness.
• B)they are of little use to end-users.
• C)divergent accounting practices between Parent and its Subsidiary may often yield misleading results.
• D)a poor performance by one or more subsidiaries can be masked through the aggregation process.

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Definitions:

Market Basket

A market basket refers to a selected set of goods or services that are consistently used and monitored over a period of time for the purpose of tracking inflation in an economy via a cost comparison.

Inflation Rate

The rate at which the general level of prices for goods and services is rising and, subsequently, purchasing power is falling.

Market Basket

A selected set of goods and services used to track changes in prices and inflation over time, representing the typical consumption of a household.

CPI

A gauge of the weighted average cost of a selection of consumer goods and services, including transportation, healthcare, and food, known as the Consumer Price Index.