What Is a Significant Problem with Using Conventional Accounting Measures

Multiple Choice

What is a significant problem with using conventional accounting measures of profit, or profit-based ratios?

A) All sources of revenue to the business are not considered in traditional methods.
B) Electronic data processing methods are demonstrating that these measures are obsolete.
C) Accounting measures include the opportunity cost of shareholder equity, understating net income.
D) There is often a mixture of historic values with current market values in the calculations.
E) Risk, a qualitative intangible, is a factor in the calculation of income.