On a common-size income statement,income taxes expense is expressed as a percentage of:
A)net income.
B)total stockholders' equity.
C)total assets.
D)net sales.

Question

Quizplus · Accepted Answer

Income taxes are typically calculated as a percentage of net sales, as opposed to other financial metrics such as net income, total stockholders' equity, or total assets. By expressing income taxes as a percentage of net sales on a common-size income statement, it can provide insight into how much of a company's revenue is going toward taxes and how that percentage may change over time.

On a Common-Size Income Statement,income Taxes Expense Is Expressed as a Percentage