Question : Which of the following statements are false?
A) When all the figures in a balance sheet are stated as percentage of the total, it is termed as horizontal analysis.
B) When financial statements of one reporting period is analyzed, it is termed as vertical analysis. C) Vertical Analysis is also termed as dynamic analysis.
Option 1: Both A and B
Option 2: Both A and C
Option 3: Both B and C
Option 4: A, B , C
Correct Answer: Both A and C
Solution : Vertical analysis shows quantities as percentages of a base figure, whereas horizontal analysis shows variations across years or periods. While vertical analysis often concentrates on one reporting period, horizontal analysis frequently examines several reporting periods.
Hence the correct answer is option 2.
Question : ______________ analysis is considered as dynamic.
Option 1: Internal Analysis
Option 2: Vertical Analysis
Option 3: External Analysis
Option 4: Horizontal Analysis
Question : Choose which of the following statements is correct.
Option 1: Horizontal or Dynamic Analysis is a time series analysis.
Option 2: Vertical or Static Analysis is carried out at one particular point of time, generally when the accounts are closed.
Option 3: Both 1 and 2
Option 4: None of the above
Question : …………. financial statement analysis is dynamic.
Option 1: Vertical analysis
Option 2: Horizontal analysis
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile