Chapter 3—The Adjusting Process

TRUE/FALSE
48.Vertical analysis compares each item in a financial statement with a total amount from the same statement.

ANS: T PTS: 1 DIF: Easy OBJ: 03-05

NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-23-Financial Statement Analysis

49. When preparing an income statement vertical analysis, each revenue and expense is expressed as a
percent of net income.

ANS: F PTS: 1 DIF: Easy OBJ: 03-05

NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-23-Financial Statement Analysis

50. Vertical analysis is useful for analyzing financial statement changes over time.

ANS: T PTS: 1 DIF: Easy OBJ: 03-05

NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-23-Financial Statement Analysis