Horizontal Analysis of Comparative Financial Statements Includes the

question 15

Multiple Choice

Horizontal analysis of comparative financial statements includes the

• A) calculation of the percentage of net sales for each item listed.
• B) calculation of dollar amount changes and percentage changes from the previous to the current year.
• C) development of common-size statements.
• D) calculation of liquidity ratios.

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Definitions:

Critical Event Criteria

Specifications or guidelines used to identify significant events that could impact an organization's operations or processes.

Revenue Recognition

An accounting principle that outlines the specific conditions under which revenue is recognized and determines how to account for it.

Capital Leases

Long-term lease agreements that transfer substantially all rights and risks of ownership from the lessor to the lessee.

FASB

The Financial Accounting Standards Board, an independent organization responsible for establishing accounting and financial reporting standards for companies and non-profit organizations in the United States.