Horizontal Analysis Showed a 25% Increase in Accounts Receivable in 2022

question 23

Multiple Choice

Horizontal analysis showed a 25% increase in accounts receivable in 2022 over 2021.Vertical analysis showed accounts receivable declining from 7.5% to 6.8% over the same period.Given this information, what conclusion(s) may be reached?

• A)The dollar amount of accounts receivable increased.
• B)The dollar amount of accounts receivable decreased.
• C)It cannot be determined if the dollar amount of accounts receivable increased or decreased.
• D)This result is impossible.An error has been made in the calculations.

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Definitions:

Federal Trade Commission

A federal agency established to enforce antitrust and consumer protection laws in the United States, preventing unfair or deceptive business practices.

Bait-And-Switch

A deceptive marketing tactic where a product or service is advertised at a low price to attract customers, who are then persuaded to purchase a more expensive item.

Advertise

To publicly announce or promote products, services, or events through various media channels to attract public interest or awareness.

Expensive Item

A product or article that is priced high in comparison to other similar items.