Question

An evaluation of a company’s financial statements in order to identify significant trends or relationships among...

An evaluation of a company’s financial statements in order to identify significant trends or relationships among the items is called a(n) _____ analysis.

a.

domestic
b.

financial statement
c.

management accounting
d.

accounting
e.

relative
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Answer #1

An evaluation of a company’s financial statements in order to identify significant trends or relationships among the items is called a FINANCIAL STATEMENT analysis.

CORRECT ANSWER : b : FINANCIAL STATEMENT ANALYSIS

We use financial statement of last 3 to 10 years and calculate various ratios, prepare commonsize & comparative statements which helps in identifying the relationship among various items. It helps us in building trends.

so This answer only matches.

Accounting is not in itself shows any trends. management accounting is a branch of accounting which helps in taking decisions regarding pricing, volume of production etc.

Relative analysis uses data of comparable industries or companies to analyse performance.

Domestic analysis emphasis on analysis on domestic parameters which may include country, industry or company

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