The Bristol Corporation data for the current year and prior year is as follows: With respect to selling/general expenses, what would a horizontal analysis report?
A)The current ratio is 0.44.
B)There was a 4.28% increase from prior to current year.
C)There was a 4.28% decrease from prior to current year.
D)Selling/general expenses are 108.27% of net sales revenue.

Question

The Bristol Corporation data for the current year and prior year is as follows:  With respect to selling/general expenses, what would a horizontal analysis report?
A)The current ratio is 0.44. 
B)There was a 4.28% increase from prior to current year. 
C)There was a 4.28% decrease from prior to current year. 
D)Selling/general expenses are 108.27% of net sales revenue.

Quizplus · Accepted Answer

A horizontal analysis compares the current year to the prior year, so the correct answer will involve a comparison between those two years. Option A is incorrect because it refers to the current ratio, which is not relevant to selling/general expenses. Option B is incorrect because it states an increase, while the question does not indicate whether expenses increased or decreased. Option D is incorrect because it does not provide a comparison between the current and prior years. Therefore, the correct answer is C, which states that selling/general expenses decreased by 4.28% from the prior year to the current year.

The Bristol Corporation Data for the Current Year and Prior