The Percentage Analysis of Increases and Decreases in Individual Items

question 46

Multiple Choice

The percentage analysis of increases and decreases in individual items in comparative financial statements is called

• A) vertical analysis
• B) solvency analysis
• C) profitability analysis
• D) horizontal analysis

---

Definitions:

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal.

Net Income

The total profit or loss of a company after all revenues, expenses, taxes, and dividends have been accounted for.

FIFO

An inventory valuation method that assumes the first items purchased are the first ones sold, standing for "First In, First Out."

Gross Profit

The difference between sales revenue and the cost of goods sold before accounting for other operating expenses.