In interpreting common-size financial statements denominated in a foreign currency, a word of caution is that there may be differences in the
A)accounting principles the companies use for reporting.
B)culture of the company's stakeholders.
C)time period covered in the statements.
D)classification of balance sheet items.

Question

Quizplus · Accepted Answer

Accounting principles can vary between countries, and therefore, there may be differences in how financial statements are prepared and reported. This can affect the interpretation of common-size financial statements denominated in a foreign currency.

In Interpreting Common-Size Financial Statements Denominated in a Foreign Currency