In: Accounting
(a)Distinguish among the following bases of comparison: intracompany, intercompany, and industry averages.
(b)Give the principal value of using each of the three bases of comparison.
a) |
Intra company analyse between two or more entities within same legel entity |
Inter company analyse between two or more related internal legal entities with common control |
Industry averages compares the numbers of an organization with the average numbers of the entities who have similar business |
b) |
Principal value of using each of the three bases of comparison |
The principal value of the intracompany is that one only company is used, and comparisons within that company will be used to study relationships and trends. |
The principal value of the intercompany basis is that more than one company is used, and one company will be compared to another company in the same industry. |
The principal value of Industry is that one company will be compared to the average of multiple other companies within that same industry. |
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