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What is a limitation of comparing financial statements of different firms?
  • a)
    It provides a reliable basis to assess performance.
  • b)
    It enables a comparative study of department-wise efficiency.
  • c)
    It may not provide a reliable basis to assess performance.
  • d)
    It helps in forecasting the future results.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
What is a limitation of comparing financial statements of different fi...
Comparing financial statements of different firms may not provide a reliable basis to assess performance. This is because different firms may adopt different accounting procedures, records, policies, and classification of items under similar headings in their financial statements. These differences can make it challenging to make accurate comparisons and draw meaningful conclusions about the performance, efficiency, profitability, and financial condition of the firm compared to the industry as a whole.
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What is a limitation of comparing financial statements of different firms?a)It provides a reliable basis to assess performance.b)It enables a comparative study of department-wise efficiency.c)It may not provide a reliable basis to assess performance.d)It helps in forecasting the future results.Correct answer is option 'C'. Can you explain this answer?
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What is a limitation of comparing financial statements of different firms?a)It provides a reliable basis to assess performance.b)It enables a comparative study of department-wise efficiency.c)It may not provide a reliable basis to assess performance.d)It helps in forecasting the future results.Correct answer is option 'C'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is a limitation of comparing financial statements of different firms?a)It provides a reliable basis to assess performance.b)It enables a comparative study of department-wise efficiency.c)It may not provide a reliable basis to assess performance.d)It helps in forecasting the future results.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is a limitation of comparing financial statements of different firms?a)It provides a reliable basis to assess performance.b)It enables a comparative study of department-wise efficiency.c)It may not provide a reliable basis to assess performance.d)It helps in forecasting the future results.Correct answer is option 'C'. Can you explain this answer?.
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