Explain the difference between horizontal analysis and vertical analysis of a company's financial statements.
What will be an ideal response?
Answers will vary
Horizontal analysis means examining individual items from the financial statements over a period of time; it is also called trend analysis. For example, calculating the percentage change in sales over the past four years would be a form of horizontal analysis. Vertical analysis is conducted within the financial statements for a single period. For example, the amounts of cost of goods sold, gross margin, operating income, and net income for the current year might all be compared to the amount of sales revenue for that year.
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Which of the following would not require the use of cost behavior analysis?
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On September 15, SkateWorld borrowed $70,000 cash from Mutual Bank by signing a 6%, 60-day note payable. a. Prepare SkateWorld's journal entry to record the issuance of the note payable.b. Prepare SkateWorld's journal entry to record the payment of the note at maturity.
What will be an ideal response?
Marvel Machine Corporation requires its employees to have a high school diploma, claiming a definite connection between a high school education and job performance. In a suit against Marvel under the Civil Rights Act of 1964, this requirement is shown to have a discriminatory effect. Marvel has
A. an affirmative action defense. B. a bona fide occupational qualification defense. C. a business necessity defense. D. no defense.