In analyzing the financial statements of a company a single item on the financial statements
A) should be reported in bold-face type.
B) is more meaningful if compared to other financial information.
C) is significant only if it is large.
D) should be accompanied by a footnote.

Question

Quizplus · Accepted Answer

Financial statements should be analyzed as a whole, and one item alone may not provide much insight. For example, a company may report high revenues, but if costs and expenses are also high, the company may not be profitable. Therefore, comparing one item to other financial information, such as other periods or industry averages, can provide more meaningful analysis.

In Analyzing the Financial Statements of a Company a Single