Select the Incorrect Statement Regarding Horizontal Analysis

Multiple Choice

Select the incorrect statement regarding horizontal analysis.

A) Percentage analysis involves establishing the relationship of one amount to another.
B) In doing horizontal analysis, an account is expressed as a percentage of the previous balance of the same account.
C) Percentage analysis attempts to eliminate the materiality problem of comparing firms of different sizes.
D) A horizontal analysis of cost of goods sold on the income statement includes dividing net income by total revenue.