Which of the following may be a limitation of financial statements?
A)Subject to biases of management
B)Provides no information on the company's accounting methods
C)Typically reflects the view of inherently unethical managers
D)Communicates only market values and no historical information

Question

Quizplus · Accepted Answer

Financial statements are prepared by the management of a company and therefore may be subject to their biases or the desire to present a positive image of the company's financial health. This highlights a limitation of financial statements as they may not always present an accurate picture of a company's financial position. The other options (B, C, and D) are not accurate as financial statements do provide information on the accounting methods used, may reflect the view of ethical managers, and typically provide both market values and historical information.

Which of the Following May Be a Limitation of Financial