Which of the Following Is Not True About Common Size

question 78

Multiple Choice

Which of the following is not true about common size financial statements?

• A) Such statements are used to uncover data irregularities.
• B) Such statements are constructed by calculating the percentage each line item of the income statement, balance sheet, and cash flow statement is of annual sales.
• C) Such statements are useful for comparing businesses of different sizes in the same industry at different moments in time.
• D) Common size statements applied over a number of consecutive periods may be used to determine if the target firm is deferring necessary spending.
• E) Common size statements may be calculated for both quarterly and annual financial data.

---

Definitions:

Functional Groups

Distinct clusters of atoms in molecules that dictate the unique chemical behaviors of those molecules.

Leucine Zipper Proteins

are a type of transcription factor protein characterized by a leucine zipper structure that facilitates DNA binding.

Chromatin Structure

The organization of DNA and associated proteins in the nucleus, influencing gene expression.

Enhancers

Regulatory DNA sequences that can increase the transcription of genes, often located far from the gene they regulate.