On a common-size balance sheet,all _______ accounts are shown as a percentage of _______.
A) income; total assets
B) liability; net income
C) asset; sales
D) liability; total assets
E) equity; sales

Question

Quizplus · Accepted Answer

Common-size balance sheet expresses all balance sheet items as a percentage of total assets. Therefore, on a common-size balance sheet, all liability accounts are shown as a percentage of total assets. Option A is incorrect because income items are not portrayed on the balance sheet. Option B is incorrect because net income is a part of the income statement, not the balance sheet. Option C is incorrect because assets are not expressed as a percentage of sales on a common-size balance sheet. Option E is incorrect because equity accounts are not portrayed on the balance sheet as a percentage of sales.

On a Common-Size Balance Sheet,all _______ Accounts Are Shown as a Percentage