It is easier to evaluate a firm using its financial statements when the firm:
A) Is a conglomerate.
B) Is global in nature.
C) Uses the same accounting procedures as other firms in its industry.
D) Has a different fiscal year than other firms in its industry.
E) Tends to have one-time events such as asset sales and property acquisitions.

Question

Quizplus · Accepted Answer

When a firm uses the same accounting procedures as other firms in its industry, it makes it easier to evaluate and compare its financial performance directly with its peers. Standardized accounting practices help in making more accurate comparisons and assessments.

It Is Easier to Evaluate a Firm Using Its Financial