Select the Incorrect Statement Regarding the Analysis of Absolute Amounts

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

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

Correct Answer:

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