Question Details

Which of the following is not a limitation of financial statement 


1. Which of the following is not a limitation of financial statement analysis?
a. The cost basis
b. The use of estimates
c. The diversification of firms
d. The availability of information
2. The use of alternative accounting methods
a. is not a problem in ratio analysis because the footnotes disclose the method used.
b. may be a problem in ratio analysis even if disclosed.
c. is not a problem in ratio analysis since eventually all methods will lead to the same
end.
d. is only a problem in ratio analysis with respect to inventory.
3. Traditional financial statements are based on
a. unadjusted cost.
b. price-level adjusted cost.
c. the lower of cost or price-level adjusted historical cost.
d. fair market value.
4. Estimates are used in financial statements in determining all of the following except
a. contingent losses.
b. cost of goods sold.
c. periodic depreciation.
d. warranty costs.
5. In addition to differences in inventory costing methods, differences also exist in reporting
all of the following except
a. amortization.
b. depletion.
c. depreciation.
d. warranty costs.



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