When a horizontal analysis is performed and a zero or negative amount is reported in the base year, then
A) no percentage change can be computed.
B) the percent change will be negative.
C) the accountant has made a mistake.
D) the percentage change will be 100% of greater.

Question

Quizplus · Accepted Answer

When a zero or negative amount is reported in the base year, there is no amount to compare to in the subsequent year. Therefore, no percentage change can be computed.

When a Horizontal Analysis Is Performed and a Zero or Negative