The comparison of activity measures of different companies is complicated by the fact that:
A)different inventory cost flow assumptions may be used.
B)dollar amounts of assets may be significantly different.
C)only one of the companies may have preferred stock outstanding.
D)the number of shares of common stock issued may be significantly different.

Question

Quizplus · Accepted Answer

Different inventory cost flow assumptions can lead to different reported inventory values, which can in turn affect the reported cost of goods sold and net income. This can make it difficult to compare the activity measures of different companies that use different inventory cost flow assumptions.

The Comparison of Activity Measures of Different Companies Is Complicated