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Author Question: Which of the following is a difference between internal comparison and external comparison with ... (Read 117 times)

ereecah

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on: Jul 6, 2018
Which of the following is a difference between internal comparison and external comparison with regard to financial statement analysis?
 
  A) An internal comparison reveals unexpected relationships within a company, whereas an external comparison reveals the absence of expected relationships outside a company.
  B) An internal comparison involves comparing a company with the industry as a whole, whereas an external comparison involves comparing a company's current performance with its past experience.
  C) An internal comparison is done by an accountant or auditor, whereas an external comparison is done by a forensic accountant.
  D) An internal comparison allows the examination of changes within a company over time, whereas an external comparison reveals the company's relative performance and financial standing.

Question 2

Accounts Payable would be shown on the ___________________ .
 a. debit side of the trial balance
  b. credit side of the trial balance
  c. not on the trial balance
  d. debit and credit side of the trial balance


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gabrielle_lawrence

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Reply #1 on: Jul 6, 2018
Answer to Question 1

D
Explanation: D) An internal comparison involves comparing the subject company's current performance and financial condition with its past experience. Such comparisons allow the examination of changes within a company over time. In contrast, external comparisons involve comparing the subject company with similar companies or with the industry as a whole (industry averages). Such comparisons reveal the company's relative performance and financial standing.

Answer to Question 2

B


ereecah

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Reply 2 on: Jul 6, 2018
Great answer, keep it coming :)

smrtceo

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Reply 3 on: Yesterday
:D TYSM

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