Which of the Following Statements About Financial Statement Analysis Is

question 98

Multiple Choice

Which of the following statements about financial statement analysis is incorrect?

• 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:

Larger Cost Centre

An organizational unit or function within a business responsible for managing significant cost allocations for monitoring and optimizing resource usage.

AASB 6/IFRS 6 Disclosure

Requirements related to the exploration for and evaluation of mineral resources, detailing financial reporting standards for these activities.

E&E Assets

Exploration and Evaluation Assets, specific to the extractive industries, representing capital expenditures on the exploration and evaluation of mineral resources.

Pre-exploration Costs

Expenses incurred before the actual exploration activity begins, such as for initial research or permitting.