Which of the Following Statements Is False

question 28

Multiple Choice

Which of the following statements is false?

• A)Common-size balance sheets allow for comparison of firms with different levels of total assets by introducing a common denominator.
• B)The common-size balance sheet reveals the composition of assets within major categories.
• C)Each item on a common-size balance sheet is expressed as a percentage of sales.
• D)The common-size balance sheet reveals the capital and the debt structure of the firm.

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Definitions:

Incorporated

Refers to the process of legally declaring a business as a separate legal entity, distinct from its owners, with rights to own property and sue or be sued.

Creature of the State

An entity that is created by and subject to state law, often used to describe municipalities or corporations.

Incorporation Statute

An Incorporation Statute is a law that outlines the process, requirements, and legal implications of forming a corporation.

Perpetual Existence

A characteristic of certain business entities, such as corporations, indicating they can continue indefinitely unless dissolved.