Horizontal Analysis

question 61

Multiple Choice

Horizontal analysis

• A)is also called trend analysis.
• B)can be carried out on statement of financial position data but not on statement of income data.
• C)is a technique for evaluating a financial statement item in the current year with other items in the current year.
• D)uses the base year as the most current year being examined.

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Definitions:

Liability Account

An accounting record that captures the amounts a company owes to others.

Gross Sales

represent the total sales revenue before any deductions are made for returns, allowances, or discounts.

Cash Sales

Transactions in which goods or services are exchanged immediately for cash payment.

Credit Sales

Sales made on credit, allowing buyers to pay at a later date, usually generating accounts receivable for the seller.