A Vertical Analysis Is Primarily Concerned With

question 115

Multiple Choice

A vertical analysis is primarily concerned with:

• A) the dollar amount of the change in various financial statement amounts from year to year.
• B) individual financial statement items expressed as a percentage of a base (which represents 100%).
• C) percentage changes in the balances shown in comparative financial statements.
• D) the change in key financial statement ratios over a specified period of time.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in a linear fashion.

Delivery Equipment

Assets such as trucks and vans used by a company for the purpose of delivering products to customers.

Office Equipment

Tangible items used in an office environment for performing business operations, such as computers, printers, and furniture.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired.