All of the Following Statements Regarding a Horizontal Analysis Are

question 160

Multiple Choice

All of the following statements regarding a horizontal analysis are true except

• A) A horizontal analysis is used to compare an item in a current statement with the same item in prior statements.
• B) A horizontal analysis can be performed on a balance sheet and income statement, but not on a statement of cash flows.
• C) If Fees Earned in 2013 is $125,000 and Fees Earned in 2014 is $143,750, a horizontal analysis will indicate a 15% increase over this period.
• D) When two statements are compared in horizontal analysis, the earlier statement is used as the base for computing the amount and the percent of change.

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