The dollar change for a comparative financial statement item is calculated by:
A)Subtracting the analysis period amount from the base period amount.
B)Subtracting the base period amount from the analysis period amount.
C)Subtracting the analysis period amount from the base period amount,dividing the result by the base period amount,then multiplying that amount by 100.
D)Subtracting the base period amount from the analysis period amount,dividing the result by the base period amount,then multiplying that amount by 100.
E)Subtracting the base period amount from the analysis amount,then dividing the result by the base amount.

Question

Quizplus · Accepted Answer

The dollar change is calculated by subtracting the base period amount from the analysis period amount. This gives us the actual dollar amount of change that occurred between the two periods. Choosing option A would give us a negative value, which may be confusing as to whether it's an increase or decrease. Option C and E both involve additional steps that aren't necessary to calculate the dollar change. Option D would give us a percentage change rather than a dollar amount.

The Dollar Change for a Comparative Financial Statement Item Is