Common-size financial statements are based on
A)percentages of other numbers on the same statements.
B)a percent comparison of other companies in the same industry.
C)a common way of preparing certain types of financial statements.
D)percentages of increases and decreases compared to the previous accounting period.

Question

Quizplus · Accepted Answer

Common-size financial statements are prepared by expressing all line items as a percentage of a base figure, which is usually total assets for the balance sheet and revenue for the income statement. Therefore, the percentages are based on other numbers on the same statements.

Common-Size Financial Statements Are Based on