Sunshine Farm Supply Following are selected data from the financial statements of Sunshine Farm Supply:
Refer to the data for Sunshine Farm Supply.
Which of the following would result from a horizontal analysis of its balance sheet?
A)Accounts receivable increased $22,000 or 57.9% during 2012.
B)Accounts receivable is five times larger than Merchandise inventory in 2012.
C)Accounts receivable is 13.3% of total assets for 2012.
D)Merchandise inventory is 2.7% of total assets for 2012.

Question

Sunshine Farm Supply Following are selected data from the financial statements of Sunshine Farm Supply:
 Refer to the data for Sunshine Farm Supply.
Which of the following would result from a horizontal analysis of its balance sheet?
A)Accounts receivable increased $22,000 or 57.9% during 2012. 
B)Accounts receivable is five times larger than Merchandise inventory in 2012. 
C)Accounts receivable is 13.3% of total assets for 2012. 
D)Merchandise inventory is 2.7% of total assets for 2012.

Quizplus · Accepted Answer

A horizontal analysis compares financial statement data for two or more years to identify changes over time. Therefore, the only option that provides information on the change in a specific account over time is option A, which states that accounts receivable increased by $22,000 or 57.9% during 2012. Options B, C, and D provide static information on the balance sheet accounts but do not provide any information on changes over time.

Sunshine Farm Supply Following Are Selected Data from the Financial