Match each definition that follows with the term a-h it defines.
-occurs when a company abandons a segment
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

Discontinued operations refer to when a company chooses to abandon a segment of its operations.

Answer: B
 Extraordinary items are events or transactions that are considered to be abnormal or infrequent and are reported separately on a company's financial statements.

Answer: C
 A change in accounting principle occurs when a company chooses to switch from one generally accepted accounting principle to another.

Answer: D
 Horizontal analysis involves comparing a company's financial information over time to identify trends and patterns.

Answer: E
 Vertical analysis involves comparing the different items on a company's financial statements to each other in order to identify relationships.

Answer: F
 Common-sized financial statements involve presenting a company's financial information as a percentage of a common base, such as total revenue or total assets.

Answer: G
 Current position analysis refers to examining a company's current financial situation, including its liquidity, solvency, and working capital.

Answer: H
 Profitability analysis involves evaluating a company's ability to generate profits and identifying the factors that affect its profitability.

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