Which of the Following Statements Regarding a Horizontal Analysis Is

question 71

Multiple Choice

Which of the following statements regarding a horizontal analysis is false?

• A) A horizontal analysis is used to compare an item in a current statement with the same item in prior statements.
• B) A horizontal analysis can be performed on a balance sheet and income statement, but not on a statement of cash flows.
• C) If Fees Earned in Year 1 is $125,000 and Fees Earned in Year 2 is $143,750, a horizontal analysis will indicate a 15% increase over this period.
• D) When two statements are compared in horizontal analysis, the earlier statement is used as the base for computing the amount and the percent of change.

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Definitions:

Policy-Making

is the process by which governments, organizations, or other groups develop and implement rules, laws, or guidelines to govern or guide behavior.

Avoid Conflict

the practice of evading confrontations or disputes to maintain harmony or prevent escalation.

Decision-Making

The cognitive process of selecting a course of action from among multiple alternatives.

Group Consensus

A collective agreement or shared understanding reached by a group, typically after discussion and consideration of various perspectives.