In Performing a Vertical Analysis, the Base for Prepaid Expenses

question 24

Multiple Choice

In performing a vertical analysis, the base for prepaid expenses is

• A) total current assets.
• B) total assets.
• C) total liabilities.
• D) prepaid expenses in a previous year.

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Definitions:

Regressive

Pertaining to a tax system in which the tax rate decreases as the taxable amount increases, burdening proportionally more on lower-income earners.

Proportional

Corresponding in size, degree, or intensity; having a constant relation in degree or number between the parts.

Sales Taxes

Taxes imposed by governmental entities on sales of goods and services, typically collected at the point of sale from the consumer.

Regressive

Referring to a tax system where the tax rate decreases as the taxable amount increases, placing a higher relative burden on lower-income earners.