Question : Which of the following statements are false?
A) When all the figures in a balance sheet are stated as percentage of the total, it is termed as horizontal analysis.
B) When financial statements of one reporting period is analyzed, it is termed as vertical analysis.
C) Vertical Analysis is also termed as dynamic analysis.
Option 1: Both A and B
Option 2: Both A and C
Option 3: Both B and C
Option 4: A, B , C
Correct Answer: Both A and C
Solution : Vertical analysis shows quantities as percentages of a base figure, whereas horizontal analysis shows variations across years or periods. While vertical analysis often concentrates on one reporting period, horizontal analysis frequently examines several reporting periods.
Hence the correct answer is option 2.
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