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

question 82

Multiple Choice

Which of the following is NOT true of common-size income statements?

• A) Each income statement item is standardized by dividing it by total assets.
• B) Income statement accounts are represented as percentages of net sales.
• C) Each income statement item is standardized by dividing it by net sales.
• D) Common-size income statements analysis is a specialized application of ratio analysis.

---

Definitions:

Irritability

A state of being easily annoyed or angered, often a symptom of stress, fatigue, or underlying health issues.

Irregular Rhythms

Abnormal patterns in the sequence of heartbeats, often relating to health issues.

Basic Trust

A term coined by psychologist Erik Erikson describing the first stage of psychological development wherein a child learns whether the world is trustworthy and safe.

Erikson

A psychologist known for his theory on the psychosocial development of human beings.