Indicate whether each of the following statements about financial statement analysis is true or false.Meaningful comparisons between two companies generally should be made using percentage analysis or ratio analysis, not absolute amounts. ______The materiality of accounting information refers to whether it is viewed as favorable (good news) or unfavorable (bad news). ______Companies must account for immaterial items in compliance with generally accepted accounting principles. ______To judge the materiality of an absolute financial statement amount, one must consider the size of the company reporting it. ______Comparing percentages derived from financial statement analysis has the drawback of varying materiality levels. ______
What will be an ideal response?
Meaningful comparisons between two companies generally should be made using percentage analysis or ratio analysis, not absolute amounts. T
The materiality of accounting information refers to whether it is viewed as favorable (good news) or unfavorable (bad news). F
Companies must account for immaterial items in compliance with generally accepted accounting principles. F
To judge the materiality of an absolute financial statement amount, one must consider the size of the company reporting it. T
Comparing percentages derived from financial statement analysis has the drawback of varying materiality levels. F
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What will be an ideal response?
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Answer the following statement true (T) or false (F)
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a. money b. investors c. physical capital d. labor and talent