Why Is It That Horizontal Analysis Is Performed Only on the Income

question 34

Multiple Choice

Why is it that horizontal analysis is performed only on the income statement and balance sheet, but not on the statement of cash flows?

• A) When searching for fraud, examining the statement of cash flows is not as effective as comparing actual changes in account balances.
• B) Horizontal analysis converts balance sheet and income statement to change statements whereas the statement of cash flow is already a change statement.
• C) The statement of cash flows does not provide any valuable fraud-related information.
• D) Horizontal analysis of balance sheets and income statements is relatively easy, while applying the same procedure to the statement of cash flows is complicated.

Comprehend how emotions, positive or negative, can influence the workplace environment.

Understand how attitudes are formed and their components.

Recognize the importance of understanding stress in the workplace for management practices.

Understand the concept of cognitive dissonance and its impact on behavior and attitude change.

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Definitions:

Goodwill

Goodwill in business refers to the intangible asset that arises when a company acquires another entity at a price above its fair market value, reflecting the value of the company's brand, customer base, and other non-physical assets.

Incentives

Motivations or rewards designed to encourage specific actions or behaviors.

Style and Tone

The manner of expression in writing or speech, reflecting the author's attitude and personality through the choice of words and sentence structure.

Grammar

The system and structure of a language, including its rules and conventions, governing the composition of phrases, clauses, and sentences.