The least effective method for comparing account balances from period to period is:
A) To focus on and calculate changes in the actual financial statement numbers (raw data)
B) Perform horizontal analysis
C) Study the statement of cash flows
D) None of the above

Question

Quizplus · Accepted Answer

A: Correct; It is difficult to assess the magnitude or significance of changes in account balances looking only at raw data, especially when the numbers are large.
B: Incorrect; This is the most effective method
C: Incorrect; This is the second most effective method
D: Incorrect

The Least Effective Method for Comparing Account Balances from Period