Assertion (A): In a common-size statement, figures of previous year are taken as base for comparison. Reason (R): Common-size statements enable horizontal analysis. In the context of the above two statements, which of the following is correct?

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KollegeApply · Accepted Answer

Both (A) and (R) are incorrect. Explanation: A common-size statement expresses each item as a percentage of a common base for the same year, rather than comparing figures from previous years. Also, it is used for vertical analysis not horizontal analysis.

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