For trend analysis to work correctly,the accountant should divide the item in one year by the:
A)beginning percentage.
B)base year total.
C)current year total.
D)horizontal analysis.

Question

Quizplus · Accepted Answer

Trend analysis involves analyzing changes in amounts over time. To do this accurately, the accountant needs a base year total, which is why the item in one year needs to be divided by the base year total. This allows for a comparison of changes in the item over time relative to a known starting point. Dividing by the beginning percentage or current year total is not necessary for trend analysis, and horizontal analysis is a different analytical technique altogether.

For Trend Analysis to Work Correctly,the Accountant Should Divide the Item