Financial ratio,percentage,and trend comparisons can be distorted by all of the following except:
A) aggressive revenue recognition practices.
B) the timing of asset purchases.
C) accounting for similar economic fundamentals in similar fashion.
D) the presence of nonrecurring items among the firms being analyzed.

Question

Financial ratio,percentage,and trend comparisons can be distorted by all of the following except: 
A) aggressive revenue recognition practices.
B) the timing of asset purchases.
C) accounting for similar economic fundamentals in similar fashion.
D) the presence of nonrecurring items among the firms being analyzed.

Quizplus · Accepted Answer

Accounting for similar economic fundamentals in similar fashion would actually help prevent distortion in financial ratio, percentage, and trend comparisons. The other choices, such as aggressive revenue recognition practices, timing of asset purchases, and the presence of nonrecurring items, can all potentially distort the comparisons.

Financial Ratio,percentage,and Trend Comparisons Can Be Distorted by All of the Following