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

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Definitions:

Debits

Accounting entries that result in an increase in assets or expenses and a decrease in liabilities, equity, or income.

Credits

In accounting, credits are entries that decrease assets or increase liabilities and equity on a company's balance sheet.

Double-entry Bookkeeping System

A method of bookkeeping where every entry to an account requires a corresponding and opposite entry to a different account, ensuring the accounting equation is always in balance.

Fraud

A deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.