Accounting for IGCSE & O level - Advanced Principles (Section 8 - No. 5)
Which of the following are considered limitations of accounting statements and ratio analysis?
They are backward-looking.
They are based on historic information.
They may be influenced by different accounting policies.
Financial statements may not be comparable.
Forklaring
Accounting statements primarily reflect past performance. Moreover, the adoption of different accounting policies and the lack of standardized data make comparisons challenging.