Hardman and Jennings,LLP,an audit firm,compares bad debt expense of a client in the current period to bad debt recorded for the past three periods.Hardman and Jennings is performing which type of analysis?
A)Trend.
B)Ratio.
C)Critical.
D)Reasonableness.

Question

Quizplus · Accepted Answer

Hardman and Jennings is comparing bad debt expense over time to identify patterns or trends, which is characteristic of trend analysis. Ratio analysis involves comparing two financial ratios, critical analysis involves analyzing a company's critical success factors, and reasonableness analysis involves evaluating the plausibility and logic of financial statements.

Hardman and Jennings,LLP,an Audit Firm,compares Bad Debt Expense of a Client