1. Differences in accounting practices can lead to comparability problems in all of the following cases except ________________.

accounting for inventory

accounting for depreciation

setting aside reserves for future contingencies

All of the above

2. Accounting standards in foreign countries often differ from accounting standards in the USA with respect to __________.

depreciation

reserving practices

treatment of intangibles

all of the above

3. If the interest rate on debt is higher than the ROA, then a firm will __________ if it increases the use of debt in its capital structure.

decrease its ROE

increase its ROE

not change its ROE

change its ROE in an indeterminable manner