Q.Which of the following statements is not true ?

Trend % = current-year figure ÷ base-year figure × 100 = 88,000 ÷ 80,000 × 100 = 110%.

In the TN HSC Class-12 Accountancy syllabus (Financial Statement Analysis — Trend Analysis), each item of a later year is expressed as a percentage of its base-year value, with the base year taken as 100%.

Given: First (base) year expenses = ₹80,000 (= 100%); second year expenses = ₹88,000.

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The false statement is option (a): trend analysis studies figures over a series of years, not one year.

Let us test each statement:

• (a) FALSE — Trend analysis (trend percentage analysis) selects a base year (=100) and expresses the figures of several successive years as percentages of that base to reveal the direction and rate of change over time. It inherently needs more than one year; describing it as the study of movement of figures for one year is incorrect.
• (b) TRUE — Notes to accounts and schedules do form an integral part of the financial statements.
• (c) TRUE — Common-size statements express each item as a percentage of a common base (e.g. revenue from operations, or total assets). …

Trend percentage in year 2 = (₹88,000 / ₹80,000) × 100 = 110% — option (c).

In trend analysis, the earliest year is taken as the base year = 100%, and each subsequent year's figure is expressed as a percentage of that base:

Trend % = (Current year figure / Base year figure) × 100.

Here the base year (first year) expenses are ₹80,000 = 100%. For the second year:

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