- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 11. Financial Analysis Techniques
- Subject 1. Analytical Tools and Techniques
CFA Practice Question
Ratios for all companies following generally accepted accounting principles ______
B. can vary due to different accounting treatments.
C. will always be correct.
A. will always be standardized.
B. can vary due to different accounting treatments.
C. will always be correct.
Correct Answer: B
Generally accepted accounting principles can lead to substantially different financial statements for similar companies, depending on the accounting treatments the companies elect.
User Contributed Comments 3
| User | Comment |
|---|---|
| viannie | different accounting treatment for example: inventory -> FIFO or LIFO or etc ... |
| johntan1979 | Depreciation, bad debt write-off... |
| jabiller | Generally accepted and can vary do not make sense. |