Which of the Following Statements Is True Regarding Vertical Analysis

question 120

Multiple Choice

Which of the following statements is true regarding vertical analysis?

• A)Common-size financial statements can be used to compare businesses of different sizes.
• B)Vertical analysis can only be used with balance sheet accounts.
• C)Vertical analysis can only be used with income statement accounts.
• D)Vertical analysis can only be used with retained earnings accounts.

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Definitions:

Intensity

The degree of strength, force, or energy with which an action is performed or an attribute is possessed.

Sociability

The quality of being inclined to engage socially with others, often gauged by the ease and frequency of interactions in social situations.

Conditional Stimulus

In classical conditioning, a previously neutral stimulus that, after being associated with an unconditioned stimulus, comes to trigger a conditioned response.

Unconditional Response

An automatic, reflexive reaction to a stimulus that does not require learning or conditioning to occur.