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

question 94

Multiple Choice

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

• A) Each asset and liability item on the balance sheet is standardized 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 standardized by dividing it by sales.
• D) Common-size balance sheets allow us to make meaningful comparisons between the balance sheets of two firms that are different in size.

---

Definitions:

Decision Tables

A tabular method for representing and analyzing logical relationships among variables and their possible outcomes.

State of Nature

A term often used in decision theory and statistics to describe scenarios or conditions that are beyond the control of decision-makers, such as market trends or natural disasters.

Maximin Criterion

A decision-making principle that suggests choosing the option with the greatest minimum payoff, particularly under uncertainty, to ensure the best worst-case outcome.