Horizontal Analysis Showed a 25% Increase in Accounts Receivable in 2018

question 27

Multiple Choice

Horizontal analysis showed a 25% increase in accounts receivable in 2018 over 2017. 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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