Which of the Following Statements Regarding Horizontal Analysis Is Not

question 49

Multiple Choice

Which of the following statements regarding horizontal analysis is not true?

• A)Percentage analysis involves computing the percentage relationship between two amounts.
• B)A horizontal analysis of cost of goods sold on the income statement includes dividing net income by total revenue.
• C)Horizontal analysis attempts to eliminate the materiality problem of comparing firms of different sizes.
• D)In horizontal percentage analysis,a financial statement line item is expressed as a percentage of the previous balance of the same item.

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Definitions:

Track Record

The history of performance, achievements, or the reliability of an individual, organization, or product over a period of time.

Contract Expires

The moment when a formal agreement, particularly relating to employment or services, reaches its end date and is no longer in effect unless renewed.

Secondary Boycott

A form of protest in which a union refuses to work for, or urges others to boycott, companies that do business with an employer it is in dispute with.

Taft-Hartley Act

A 1947 US federal law that restricted the activities and power of labor unions, including prohibiting certain types of strikes and requiring union leaders to swear anti-communist oaths.