In a Common Size Statement, the Statement of Financial Position

question 87

Multiple Choice

In a common size statement, the statement of financial position may be expressed as a percentage of ____________ while the statement of comprehensive income may be expressed as a percentage of ____________.

• A) liabilities plus equity; net income
• B) assets; net income
• C) sales; liabilities plus equity
• D) liabilities plus equity; sales
• E) liabilities; sales

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Definitions:

Business

An organization or enterprising entity engaged in commercial, industrial, or professional activities.

Journal

A detailed record where all financial transactions of a business are initially recorded before being transferred to accounts in the ledger.

Chart of Accounts

A systematic list of all account titles and numbers used by a company to organize its financial transactions and prepare financial statements.

Debits

Accounting entries that increase asset or expense accounts, or decrease liability, equity, or revenue accounts; they are recorded on the left side of accounting ledgers.