The Purpose of Common Size Financial Statements Is To

question 130

Multiple Choice

The purpose of common size financial statements is to:

• A) compare the amount of common stock to other types of stock.
• B) make comparisons between firms of different sizes.
• C) make comparisons between different time periods for one company.
• D) either make comparisons between firms of different sizes or make comparisons between different time periods for one company.

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Definitions:

Assumption

An accepted fact or statement taken for granted without proof.

Applying a Generalization

Applying a generalization involves using a broad statement or principle derived from specific instances to make predictions or judgments about other cases.

Classes of Objects

Categories or groups into which objects are classified based on shared characteristics or attributes.

Valid Argument

A logical argument where if the premises are true, the conclusion must also necessarily be true.