You want to know whether selling and administrative expenses were reasonable for the past year,based on the level of sales.The best analysis for obtaining this information is
A)trend analysis.
B)vertical analysis.
C)horizontal analysis.
D)liquidity analysis.

Question

Quizplus · Accepted Answer

Vertical analysis is the best method for evaluating whether selling and administrative expenses were reasonable for the past year in relation to the level of sales. This analysis involves comparing each item on the income statement as a percentage of a base figure, such as net sales, allowing for an assessment of the proportion of sales consumed by these expenses.

You Want to Know Whether Selling and Administrative Expenses Were