The Principal Reason for Preparing Common Size Statements Is

question 23

Multiple Choice

The principal reason for preparing common size statements is

• A) to make meaningful comparisons between firms that are not the same size.
• B) to make meaningful comparisons between different quarters within the fiscal year.
• C) to eliminate the effects of inflation.
• D) to make meaningful comparisons between firms in different industries.

---

Definitions:

Gains From Trade

Gains from trade refer to the net benefits that countries or individuals obtain by selling what they produce and buying what they consume more efficiently through trade.

International Trade

The exchange of goods and services between countries, driven by comparative advantage and resulting in increased economic efficiency.

Export Cheese

The process of selling and shipping cheese to other countries from the country of origin.

Tariff

A tax imposed by a government on imported goods or services to regulate trade and protect domestic industries.