Oakley Corporation has the following comparative income statements. Which of the following statements is false with regard to this comparative data?

Question

Quizplus · Accepted Answer

The false statement is C, as a gross profit percentage cannot be negative. Common-size financial statements show the percentages and ratios of individual line items as a proportion of a base figure, such as net sales. A is true because the common-size sales percent for the base year is always 100%. B is true because common-size net income percent for a year is calculated by dividing net income by net sales. D is true because the cost of goods sold is expressed as a percentage of net sales. The only false statement is C because it states that the common-size gross profit percent for 2010 is negative, which is not possible.

Oakley Corporation Has the Following Comparative Income Statements