Which of the Following Statements About a Common-Size Balance Sheet

question 5

Multiple Choice

Which of the following statements about a common-size balance sheet is true?

• A) Each item on a common-size balance sheet is expressed as a percentage of sales.
• B) The common-size balance sheet reveals the composition of expenses relative to revenues.
• C) The common-size balance sheet reveals the capital and debt structure of the firm.
• D) Each item on a common-size balance sheet is expressed as a percentage of net income.

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Definitions:

Income Distribution

A measure of how a nation’s total GDP is distributed amongst its population.

Incentive

something that motivates or encourages an individual or entity to perform or act in a certain manner.

Poverty Line

A threshold income level below which an individual or household is considered to be living in poverty, varying by country and adjusted for family size.

Poverty Rate

The percentage of the population living below the national poverty line, indicating the proportion of people with income insufficient to meet basic needs.