The Percentage of Change in Long-Term Liabilities Between Two Balance

question 74

Multiple Choice

The percentage of change in long-term liabilities between two balance sheet dates is an example of

• A)vertical analysis.
• B)solvency analysis.
• C)profitability analysis.
• D)horizontal analysis.

---

Definitions:

Reinvested

The act of using dividends, interest, or profits from an investment to purchase additional shares or units of that investment.

Installment Method

The installment method is a tax provision allowing taxpayers to spread out income recognition over several years when reporting sales or transfers of property, helping to manage tax liability.

Depreciation Recapture

A tax provision where depreciation taken on an asset is taxed as ordinary income when the asset is sold.

Adjusted Basis

The original cost of an asset, adjusted for factors like improvements or depreciation, used to calculate capital gains or losses for tax purposes.