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

Question

Quizplus · Accepted Answer

Accounting for similar economic fundamentals in similar fashion actually helps ensure that financial ratios, percentages, and trend comparisons are not distorted. Therefore, this option cannot be the correct answer. On the other hand, nonrecurring items, aggressive revenue recognition practices, and the timing of asset purchases can all distort financial analysis.

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