Which One of the Following Is NOT True of Common-Size

question 35

Multiple Choice

Which one of the following is NOT true of common-size balance sheets?

• A) Each asset and liability item on the balance sheet is standardised by dividing it by total assets.
• B) Balance sheet accounts are represented as percentages of total assets.
• C) Each asset and liability item on the balance sheet is standardised by dividing it by sales.
• D) Common-size financial statements allow us to make meaningful comparisons between the financial statements of two companies that are different in size.