Question

The statement that shows changes in all items of financial statements in absolute and percentage terms over a period of time, for a firm, or between two firms is called ______.

• A. Common Size Statement
• B. Comparative Statement
• C. Cash Flow Statement
• D. Financial Statement

Hint:

Comparative = Comparison Over Time. Common Size = Percent of a Base. Don’t confuse both!

Answer 1

The Correct Option is B

Comparative statements are financial statements that present figures side-by-side over different accounting periods.
They show the increase or decrease in items both in absolute value and percentage terms.
This helps analyze the financial progress or decline of a business over time, or compare performance between two firms.
A Common Size Statement expresses all items as a percentage of a base amount (like total sales or total assets), but it doesn’t show the change over time.
Cash Flow Statement only shows inflows and outflows of cash. Financial Statement is a broad term, not specific to comparison.
Hence, the correct answer is (B) Comparative Statement.