Match each definition that follows with the term a-h it defines.
-an event or transaction that is both unusual and infrequent
A)discontinued operations
B)extraordinary items
C)change from one generally accepted accounting principle to another
D)horizontal analysis
E)vertical analysis
F)common-sized financial statements
G)current position analysis
H)profitability analysis

Question

Quizplus · Accepted Answer

Extraordinary items are events or transactions that are both unusual and infrequent, and they are reported separately on the income statement.

Answer: C 
 A change from one generally accepted accounting principle to another is known as an accounting change.

Answer: D 
 Horizontal analysis compares a company's financial performance over different periods by calculating the percentage change in financial statement items.

Answer: E 
 Vertical analysis expresses each financial statement item as a percentage of a base amount, generally sales or total assets.

Answer: F 
 Common-sized financial statements are financial statements that express each item as a percentage of a base amount, generally sales or total assets.

Answer: G 
 Current position analysis evaluates a company's liquidity by analyzing its ability to pay current liabilities as they come due.

Answer: H 
 Profitability analysis evaluates a company's profitability by analyzing its revenue, cost of goods sold, and expenses.

Match Each Definition That Follows with the Term A-H It