1. The statement of financial position shows how well a company has performed ov
ID: 2478881 • Letter: 1
Question
1. The statement of financial position shows how well a company has performed over a period of time. True or false?
2. Debt-to-Equity and Debt-to Assets ratios usually provide a clear picture of the financial leverage employed by a firm. The higher the level of debt, the higher the implied financial risk. An informed reader, however, understands that it is appropriate to draw this general conclusion only when comparing firms within the same or very similar industries. True or false?
4. Profit margin provides the user with a comprehensive profit picture of a firm. true or false?
8. Revenue and expense accounts are nothing more than temporary accounts. true or false?
3. Financial accounting, unlike managerial accounting, has firm guidelines that it must follow. True or false?Explanation / Answer
1. The statement of financial position shows how well a company has performed over a period of time.
false
2 Debt-to-Equity and Debt-to Assets ratios usually provide a clear picture of the financial leverage employed by a firm. The higher the level of debt, the higher the implied financial risk. An informed reader, however, understands that it is appropriate to draw this general conclusion only when comparing firms within the same or very similar industries. True or false?
true
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