Which of the following is a limitation of consolidated financial statements?
A) Consolidated statements provide no benefit for the stockholders and creditors of the parent company.
B) Consolidated statements of highly diversified companies cannot be compared with industry standards.
C) Consolidated statements are beneficial only when the consolidated companies operate within the same industry.
D) Consolidated statements are beneficial only when the consolidated companies operate in different industries.

Question

Quizplus · Accepted Answer

Consolidated statements of highly diversified companies can be difficult to compare with industry standards because they amalgamate the financials of entities across potentially disparate industries, making it challenging to benchmark against a specific industry's performance metrics.

Which of the Following Is a Limitation of Consolidated Financial