The dollar change and percentage change in the Accounts Receivable account from 2017 to 2018 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

This is an example of horizontal analysis because it involves comparing the changes in a specific account over time (from 2017 to 2018). Horizontal analysis involves analyzing changes in financial statement items over a specific period of time. Vertical analysis involves comparing the relationship between different items on a single financial statement (such as comparing accounts receivable to total assets). Profitability analysis involves analyzing a company's ability to generate profits, and solvency assessment involves analyzing a company's ability to meet its long-term financial obligations.

The Dollar Change and Percentage Change in the Accounts Receivable