The "apparent," but not the "true," financial position of a company whose sales are seasonal can differ dramatically, depending on the time of year when the financial statements are constructed.

Question

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This statement is true. The financial position of a company whose sales are seasonal may appear strong during the high sales season but could appear weak during the low sales season. Therefore, the apparent financial position may differ from the true financial position depending on the time of year the financial statements are constructed.

The "Apparent," but Not the "True," Financial Position of a Company