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easyMCQCUET Accountancy 2023 28 May Shift 12026Accountancy
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Common-Size Statements, which analyze financial statements by converting each line item into a percentage of a common base item, are also known as:

  1. A
    Dynamic analysis
  2. B
    Horizontal analysis
  3. C
    Vertical analysis
  4. D
    External analysis

Solution & Step-by-step Explanation

Common-size financial statements present quantities as percentages of a common baseline item within a single financial period (e.g., taking Revenue from Operations as in an Income Statement). This single-period, top-to-bottom structural analysis is called Vertical Analysis.

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Common-Size Statements, which analyze financial statements by converting each line item into a percentage of a common base item, are also known as:
A
Dynamic analysis
B
Horizontal analysis
C
Vertical analysis
D
External analysis

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