Horizontal Analysis of Comparative Financial Statements Includes the

question 106

Multiple Choice

Horizontal analysis of comparative financial statements includes the

• A) development of common size statements.
• B) calculation of liquidity ratios.
• C) calculation of dollar amount and percentage changes from financial statements over a period of time, as compared to a base year.
• D) evaluation of financial statement data that expresses each item in a financial statement as a percentage of a base amount.

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Definitions:

Merchandise

Goods that are bought and sold in commerce, particularly those related to retail trade.

Services

Intangible products that are consumed at the point of sale and do not result in ownership of physical goods.

Net Exports

The balance of a nation's trade, measured by subtracting its imports from its exports of goods and services.

Depreciation

The process of allocating the cost of a tangible or physical asset over its useful life, reflecting the decrease in value of an asset over time due to use, wear and tear, or obsolescence.