Question

What is a common-size balance sheet? a. A statement that is common to an industry b. A statement that expresses each account on the balance sheet as a percentage of total assets c. A statement that expresses each account on the balance sheet as a percentage of net income d. A statement that expresses each asset account on the balance sheet as a percentage of total assets and each liability account on the balance sheet as a percentage of total liabilities

Answer 1

The correct answer is c) A statement that expresses each account on the balance sheet as a percentage of total assets

Step-by-step explanation:

A common- size balance sheet is a statement that expresses each account on the balance sheet as a percentage of total assets

In other words, it is a balance sheet that shows the numeric value in a separate column of the relative percentages of total assets, This is useful for comparing the proportions, total liabilities and equity accounts between companies.