To convert a balance sheet into a common-size balance sheet statement,we restate all the numbers as percentages of ________.
A)revenue
B)total assets
C)total owners' equity
D)total liabilities

Question

Quizplus · Accepted Answer

To convert a balance sheet into a common-size balance sheet statement, we must express each account as a percentage of total assets. This is because total assets represent 100% of the balance sheet and by expressing each account as a percentage of total assets, we can compare the relative size of each account to the total assets of the company.

To Convert a Balance Sheet into a Common-Size Balance Sheet