Introduction to Accounting

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ynhevrzra

Business Finance

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Q20: A statement comparing data from two or more consecutive periods is called a:

a. horizontal analysis

b. comparative income statement

c. common-size statement

d. comparative balance sheet

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Explanation & Answer

a. horizontal analysis 

A horizontal analysis provides you with a way to compare your numbers from one period to the next, using financial statements from at least two distinct periods.

 Each line item has an entry in a current period column and a prior period column. Those two entries are compared to show both the dollar difference and percentage change between the two periods.

reference

http://www.netplaces.com/accounting/the-best-use-of-your-financial-statements/vertical-and-horizontal-analysis.htm



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Really useful study material!

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