Which of the following is not true about Comparative Statements:

The correct answer is Option (2) → This analysis is also known as 'vertical analysis'.

Comparative statements place the figures of two or more periods side by side, so the analysis runs across the years and is called horizontal analysis. "Vertical analysis" is the name of common size statements, where each item is a percentage of a total of the same year. That makes option (2) the untrue statement.

Option (1) These are the statements showing the profitability and financial position of a firm for different periods of time. — A true statement. This is what comparative statements are.

Option (3) Comparative figures indicate the trend and direction of financial position and operating results. — A true statement. Seeing several periods together shows which way the business is moving.

Option (4) The financial data will be comparative only when same accounting principles are used in preparing these statements. — A true statement. Figures prepared on different principles cannot be compared; any change must be footnoted.