To Be Useful for Decision Making, Absolute Dollar Amounts in Financial

question 49

Multiple Choice

To be useful for decision making, absolute dollar amounts in financial statements need to be compared with other information. How many of these are possible comparisons?
Prior year results
Current year sales, total assets etc.
Results of similar businesses or industry averages

• A) 0
• B) 1
• C) 2
• D) 3

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Definitions:

Mecca

A city in Saudi Arabia that is the holiest city in Islam; it is the birthplace of the Prophet Muhammad and the site of the Kaaba, towards which Muslims face when praying.

Oriented

Positioning or aligning something relative to the points of a compass or other specified directions.

Kaaba

Arabic, “cube.” A small cubical building in Mecca, the symbolic center of the Islamic world.

Muhammad

The founder of Islam, regarded by Muslims as the last messenger and prophet sent by God to guide humanity.