The denominator used when calculating a common size income statement is
A) total assets.
B) total liabilities.
C) total sales.
D) total expenses.

Question

Quizplus · Accepted Answer

The denominator used when calculating a common size income statement is usually total sales or revenue. This allows for easy comparison of different aspects of the income statement, such as expenses or net income, as a percentage of total sales. Total assets or liabilities would not be appropriate denominators for this type of analysis.

The Denominator Used When Calculating a Common Size Income Statement