David, a Financial Accountant at a Multinational Company, Is Asked

Multiple Choice

David, a financial accountant at a multinational company, is asked to study the comparative financial statements of a prospective partner firm. He uses comparative income statements to determine the changes in the assets and liabilities of the firm and whether the net income of the firm has increased or decreased over the past five years. In this scenario, David is most likely using _____.

A) activity-based costing
B) horizontal analysis
C) a statistical syllogism
D) static analysis