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When an analyst… (Class 12 Accountancy SQP 2024-25, Q27a)

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AccountancyCBSE Class 12 · Sample paper, session 2024-25 · 1 mark · MCQ

CBSE Class 12 Accountancy sample paper 2024-25: question 27(a)

From the official CBSE sample question paper for 2024-25, section B-I, question 27(a), for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q27(a) · 1 mark · MCQAnalysis of Financial Statements

When an analyst analysis the financial statements of an enterprise over a number of years, the analysis is called ______________analysis.

  1. (A)Static
  2. (B)External
  3. (C)Horizontal
  4. (D)Vertical

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Is the comparison across years or within one year?

Hint 2

Comparative statements are a tool of horizontal analysis.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Analysing the same firm's statements across several years compares each item over time.

  2. That is horizontal (dynamic) analysis; vertical analysis compares items within one year. Option (C).

    1 mark

Answer: (C) Horizontal

Where the marks are

  • Analysis over a number of years is horizontal (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Analysis of Financial Statements, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.