If a Balance Sheet Is Subjected to Vertical Analysis Which

question 120

Multiple Choice

If a balance sheet is subjected to vertical analysis which shows that current assets (using total assets as the base) have increased from 42% to 56%, this would always mean that:

• A) current assets have increased as a percentage of total assets.
• B) the dollar amount of total assets has increased.
• C) the dollar amount of total assets has decreased.
• D) the dollar amount of current assets has increased.

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Definitions:

Lenz's Law

A principle stating that an induced electrical current will flow in a direction that opposes the change causing it.

Inductor Coil

A component consisting of a wire wound around a core, used in circuits to store energy in a magnetic field when electrical current flows through it.

Voltage

The measure of electrical potential difference between two points in an electric field, driving electric current between those points.

Magnetic Polarity

Refers to the orientation of the magnetic field, denoted by north and south poles, determining the direction in which a magnetic field is applied.