Question

Common-size statements: Multiple Choice Reveal changes in the relative importance of each financial statement item to a base amount. Show the dollar amount of change for financial statement items. Do not emphasize the relative importance of each item. Compare financial statements over time. Reveal patterns in data across successive periods.

Answer 1

Reveal changes in the relative importance of each financial statement item to a base amount

Step-by-step explanation:

The common size statement refers to the financial statement in terms of balance sheet, income statement, cash flow statement, etc that determines the analysis between the companies of the same industry or different industry. It can be expressed in terms of percentage.

Therefore, in the common size statement it reveals the changes made with respect to the base amount