abhishreshthaa
Abhijeet S
PRECAUTIONS TO BE TAKEN WHILE CALCULATING THE TREND PERCENTAGE
1. The accounting principles and practices must be followed constantly over the period for which the analysis is made. This is necessary to maintain consistency and comparability.
2. The base year selected should be normal and representative year.
3. Trend percentage should be calculated only for those items which have logical relationship with one another.
4. Trend percentage should be carefully studied after consideration the absolute figures on which these are based. Otherwise, they may give misleading conclusion.
5. To make the comparison meaningful, trend percentage of the current year should be adjusted in the light of price level changes as compared to base year.
1. The accounting principles and practices must be followed constantly over the period for which the analysis is made. This is necessary to maintain consistency and comparability.
2. The base year selected should be normal and representative year.
3. Trend percentage should be calculated only for those items which have logical relationship with one another.
4. Trend percentage should be carefully studied after consideration the absolute figures on which these are based. Otherwise, they may give misleading conclusion.
5. To make the comparison meaningful, trend percentage of the current year should be adjusted in the light of price level changes as compared to base year.