The dollar change and percentage change in the accounts receivable account from 2016 to 2017 is calculated for Allison Corporation.This is an example of
A) horizontal analysis
B) vertical analysis
C) profitability analysis
D) solvency assessment

Question

Quizplus · Accepted Answer

The calculation of dollar change and percentage change in the accounts receivable account from one period to another is an example of horizontal analysis, which compares financial data over time to identify changes and trends. Vertical analysis compares items within the same period, profitability analysis evaluates a company's ability to generate profits, and solvency assessment assesses a company's ability to meet its long-term financial obligations.

The Dollar Change and Percentage Change in the Accounts Receivable