To prepare common size income statements,percentages for line items are usually based on ________.To prepare common size balance sheets,percentages for line items are usually based on ________.
A) net income; total stockholders' equity
B) net operating profit; total stockholders' equity
C) sales; total assets
D) expenses; total liabilities

Question

Quizplus · Accepted Answer

To prepare common size income statements, percentages for line items are usually based on sales because it represents the total revenue generated by a company. To prepare common size balance sheets, percentages for line items are usually based on total assets because it represents the total resources owned by a company. Therefore, the best choice is C.

To Prepare Common Size Income Statements,percentages for Line Items Are