Select the Incorrect Statement Regarding the Analysis of Absolute Amounts

Multiple Choice

Select the incorrect statement regarding the analysis of absolute amounts of various accounts reported on the financial statements.

A) Using absolute amounts eliminates the problem of varying materiality levels.
B) To fully appreciate an absolute amount, the analyst must consider the size of other accounts of the business.
C) Economic statistics such as the gross national product are built upon totals of absolute amounts reported by businesses.
D) Financial statement users with expertise in particular industries can look at absolute amounts and assess a company's performance in a certain area.