All of the Following Statements Regarding a Horizontal Analysis Are

Multiple Choice

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 Year 1 is $125,000 and Fees Earned in Year 2 is $143,750, a horizontal analysis will indicate a 15% increase over this period.
D) When two statements are compared in horizontal analysis, the earlier statement is used as the base for computing the amount and the percent of change.