Which of the following would affect the comparison of financial statements across two different firms?

I. Different accounting principles
II. Different sizes of the companies
III. Different reporting periods
IV. Different industries

A)I, III, and IV
B)I and IV
C)I and II
D)I, II, III, and IV

Question

Which of the following would affect the comparison of financial statements across two different firms?

I. Different accounting principles
II. Different sizes of the companies
III. Different reporting periods
IV. Different industries

A)I, III, and IV
B)I and IV
C)I and II
D)I, II, III, and IV

Quizplus · Accepted Answer

All listed factors can affect the comparison of financial statements across different firms. Different accounting principles can lead to different recognition and measurement of transactions. Different sizes may impact the scale and scope of operations and financial metrics. Different reporting periods can make time-sensitive comparisons difficult. Different industries can lead to variations in financial performance due to sector-specific factors.

Which of the Following Would Affect the Comparison of Financial