Horizontal Analysis Evaluates a Series of Financial Statement Data Over

question 82

Multiple Choice

Horizontal analysis evaluates a series of financial statement data over a period of time

• A) that has been arranged from the highest number to the lowest number.
• B) that has been arranged from the lowest number to the highest number.
• C) to determine which items are in error.
• D) to determine the amount and/or percentage increase or decrease that has taken place.

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Definitions:

Allocating Gain

The process of distributing profit among different accounts or investments.

Substance Over Form

An accounting principle that emphasizes the economic reality of transactions rather than their legal form to present a more accurate picture of a company's financial position.

Par-Value Method

An accounting method used for recording the issuance of stock, where the stock is recorded at its face or par value, and any amount received over par value is credited to an additional paid-in capital account.

Non-Controlling Interest

The equity in a subsidiary not attributable directly or indirectly to the parent company, often shown separately in the consolidated financial statements.