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What Is the Difficulty in Using Horizontal, Vertical, or Ratio

Question 3

Multiple Choice

What is the difficulty in using horizontal, vertical, or ratio analysis?


A) The complicated calculations required to arrive at change statements
B) Identifying the changes and speed of changes in the ratios, when the change is unexpected or unexplained
C) Knowing when a change in account balance or relationship is significant enough to signal possible fraud
D) Assessing the magnitude or significance of changes in account balances looking only at raw financial statement numbers

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