All of the following statements regarding a horizontal analysis are true except:
A) A horizontal analysis is used to compare an item in a current statement with the same item in prior statements.
B) A horizontal analysis can be performed on a balance sheet and income statement, but not on a statement of cash flows.
C) If Fees Earned in 2009 is $150,000 and Fees Earned in 2010 is $187,500, a horizontal analysis will indicate a 25% increase over this period.
D) When two statement are compared in horizontal analysis, the earlier statement is used as the base for computing the amount and the percent of change.
B
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Answer the following statements true (T) or false (F)
The essence of SFAS No. 142 is that goodwill must now be amortized over 40 years.
Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. The company has no preferred stock. The company's earnings per share is:
A. $1.71. B. $1.59. C. $26.67. D. $44.00. E. $1.65.
The FTC can issue a cease-and-desist order, which is an injunction to
A. report to the FTC immediately. B. stop doing whatever caused the complaint. C. appear before the courts. D. pay for damages caused by negligence of the firm. E. close down the firm until further notice.
When the market rate of interest drops below a bond's coupon rate, the bond will sell at a premium
Indicate whether the statement is true or false.