If you are taking a common sense approach to evaluating a firm's accounting information, which of the following would not be something that you would hope to see?
A) Financial statements audited by an outside source
B) Remembering that a balance sheet is only a snapshot in time
C) Paying great attention to current profit and not worrying about the future
D) Strategies to reduce operating expenses
E) How the company manages its cash flow

Question

Quizplus · Accepted Answer

Paying great attention to current profit and not worrying about the future is not a sound approach to evaluating a firm's accounting information as it neglects the long-term sustainability and growth of the company. Instead, a common sense approach would involve evaluating the company's financial statements audited by an outside source, remembering that a balance sheet is only a snapshot in time, analyzing strategies to reduce operating expenses, and understanding how the company manages its cash flow.

If You Are Taking a Common Sense Approach to Evaluating