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State whether the following is True or False: Comparative statements are a form of horizontal analysis.

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Question

State whether the following is True or False:

Comparative statements are a form of horizontal analysis.

True or False
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Solution

This statement is true.

Explanation:

Comparative statements compare the financial data of two or more accounting years side by side. This allows an enterprise to review increases or decreases in performance across a horizontal line from left to right, making it a classic form of horizontal analysis.

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Chapter 4: Analysis of Financial Statements - Intext Questions [Page 187]

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NCERT Accountancy Company Accounts and Analysis of Financial Statements [English] Class 12
Chapter 4 Analysis of Financial Statements
Intext Questions | Q (b) | Page 187
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