Comparability problems arise because
A)firms may use different generally accepted accounting principles.
B)inflation may affect firms differently due to accounting conventions used.
C)financial analysts do not know how to compare financial statements.
D)A and B.
E)A and C.

Question

Quizplus · Accepted Answer

Companability problems can arise because firms may use different generally accepted accounting principles and inflation may affect firms differently due to accounting conventions used. These factors can make it difficult to compare financial statements, making option D the best choice. Additionally, financial analysts may face challenges in comparing financial statements if they are not familiar with the specific accounting methods used by the firms they are analyzing, but this is not a primary reason for comparability problems.

Comparability Problems Arise Because