To be useful for decision making, absolute dollar amounts in financial statements need to be compared with other information. Which of the following are possible comparisons?
I. Prior year results
II. Current year sales, total assets etc.
III. Results of similar businesses or industry averages
A) I and II only
B) I, II and III
C) II and III only
D) None of the above

Question

Quizplus · Accepted Answer

To make informed decisions based on absolute dollar amounts in financial statements, it is necessary to compare them with other information. These comparisons can be made with prior year results (I), current year sales, total assets, etc. (II), and results of similar businesses or industry averages (III). Therefore, the best choice would be option B, which includes all of the above possible comparisons.

To Be Useful for Decision Making, Absolute Dollar Amounts in Financial