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. Due to the seasonality of sales, a company's financial position can vary significantly depending on when its financial statements are prepared. For example, a retailer might show higher profits and cash flow during the holiday season but may struggle during slower sales periods.

The "Apparent, " but Not the "True, " Financial Position