Abstract: Disclosed is a BCD arithmetic method and BCD arithmetic apparatus for use in a data processing system. The binary adder included in a data system for binary arithmetic operations is additionally utilized in the invention to provide BCD sign-magnitude addition and subtraction of packed digits. The apparatus is utilized to carry out the method steps of preconditioning one of the operands by adding a predetermined binary number to each BCD digit, performing a binary addition, and applying a decimal adjust to form the decimal arithmetic sum. Subtraction steps include performing a two's complement binary subtraction of each BCD digit, and applying a decimal adjust to form the decimal difference. The method and apparatus may be utilized with other base number systems having members which may be represented by a binary sequence that does not use all of the 2.sup.N binary combinations in the set.