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Explain the steps involved in preparing comparative statements. |
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Answer» Following are the steps to be followed in preparation of comparative statement. (i). Column 1 : In this column, particulars of items of income statements or balance sheet are written. (ii). Column 2 : Enter absolute amount of year 1. (iii). Column 3 : Enter absolute amount of year 2. (iv). Column 4 : Show the difference in amounts between year 1 and year 2. If there is an increase in year 2, put plus sign and there is a decrease put minus sign. (v).Column 5 : Show percentage increase or decrease of the difference amount shown in column 4 by dividing the amount shown in column 4 (absolute amount of increase or decrease) by column 2 (year 1 amount) Percentage increase (or) decrease = (Absolute amount of increase/decrease)/(Year 1 amount) x 100 |
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