Question

Which of the following pose problems for traditional financial statement (ratio) analysis?

I) Issues of statistical “significance”

II) Slippery accounting numbers

III) Quality of line item issues

IV) Off-balance sheet concerns

Group of answer choices

I and II

II, III and IV

II and IV

I, II and III

I, II, III and IV

Answer 1

Option 3rd   

Slippery accounting number : the company preparing the financial statements may have changed the account in which it stores financial information,so that result may differ from time to time. For example ,an expense may qppear in the cost of goods sold in one period,and in administration expenses in another period.

Off balance sheet concern

OBS financing is an accounting practice where company does not include a liability on its balance sheet.it is used to impact a company level of debt and liabilities.examples of BOS is reaserch and development partnership, joint venture and operating leases.