Which of the Following Statements About Financial Statement Analysis Is

question 29

Multiple Choice

Which of the following statements about financial statement analysis is not true?

• A)In horizontal percentage analysis,an item from the financial statements is expressed as a percentage of the same item from a previous year's financial statements.
• B)Vertical analysis compares two or more financial statement items within the same time period.
• C)Horizontal analysis for several years can be done by choosing one year as a base year and calculating increases or decreases in relation to that year.
• D)The reason behind a financial statement ratio or percentage analysis result is usually self-evident and does not require further study or analysis.

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Definitions:

Kelley's Attribution Theory

A framework suggesting that people interpret their own and others' behaviors by attributing them to either internal dispositions or external situations.

Best Fit Explanation

A theory or hypothesis that most accurately accounts for the evidence or data among competing options.

Own Behavior

An individual's actions or conduct as perceived or governed by their own conscious intentions or habits.

Consistent Personality

Refers to a psychological trait where an individual's behavior, feelings, and thoughts display a stable pattern over time and across situations.