To create a common size balance sheet, ____________ all items on the balance sheet by ____________.
A) multiply; owners' equity
B) multiply; total assets
C) divide; owners' equity
D) divide; total assets
E) multiply; debt

Question

Quizplus · Accepted Answer

A common size balance sheet is created by dividing all items on the balance sheet by total assets. This standardizes the balance sheet, making it easier to compare across companies or time periods by converting figures to percentages of total assets.

To Create a Common Size Balance Sheet, ____________ All Items