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Qualitative Characteristics of Accounting

Which of the ...

Question

Which of the following is not a Limitations of financial analysis:
1) subjectivity
2) qualitative aspects ignored
3) inter firm comparison
4) window dressing

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Solution

Dear student 3) inter firm comparison is not a Limitation of financial analysis. Regards

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Q. Window dressing is one of the limitation of financial analysis.

Q. Inter-firm comparison becomes difficult with the help of financial analysis.

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a. Ratio analysis may result in false result if variation in price levels are not considered.
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