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Basic Question 2 of 2
Which of the following choices would not likely be a cause for difficulty in comparing the financial results of different firms?
B. Choosing between the various depreciation methods.
C. Choosing between the LIFO and FIFO methods of accounting for inventory.
D. Choosing between the treatment of leases as operating or capital.
A. Choosing between the issuance of more debt or equity.
B. Choosing between the various depreciation methods.
C. Choosing between the LIFO and FIFO methods of accounting for inventory.
D. Choosing between the treatment of leases as operating or capital.
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Learning Outcome Statements
identify financial reporting choices and biases that affect the quality and comparability of companies' financial statements and explain how such biases may affect financial decisions;
evaluate the quality of a company's financial data and recommend appropriate adjustments to improve quality and comparability with similar companies, including adjustments for differences in accounting standards, methods, and assumptions;
evaluate how a given change in accounting standards, methods, or assumptions affects financial statements and ratios;
analyze and interpret how balance sheet modifications, earnings normalization, and cash flow statement related modifications affect a company's financial statements, financial ratios, and overall financial condition.
CFA® 2025 Level II Curriculum, Volume 2, Module 15.