All of the Following Statements Regarding a Horizontal Analysis Are

question 165

Multiple Choice

All of the following statements regarding a horizontal analysis are true except:

• A) A horizontal analysis is used to compare an item in a current statement with the same item in prior statements.
• B) A horizontal analysis can be performed on a balance sheet and income statement, but not on a statement of cash flows.
• C) If Fees Earned in Year 1 is $125,000 and Fees Earned in Year 2 is $143,750, a horizontal analysis will indicate a 15% increase over this period.
• D) When two statements are compared in horizontal analysis, the earlier statement is used as the base for computing the amount and the percent of change.

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Definitions:

Forward-bias

A condition in which a diode allows current to flow more easily, achieved by applying positive voltage to the anode relative to the cathode.

Enclosure

A housing or case designed to protect electronic or mechanical equipment from environmental conditions.

Conductive Dust

Dust particles that can conduct electricity, which can create short circuits and other electrical hazards if deposited on electronic components.