A common size income statement:
A) uses the same dollar amount of revenues for each year.
B) expresses items as a percentage of revenues.
C) makes comparisons between years more difficult.
D)is useful in estimating the impact of inflation.

Question

Quizplus · Accepted Answer

A common size income statement expresses each item as a percentage of revenues, making it easier to compare the relative sizes of different expenses and revenues. This can be useful in analyzing trends and identifying areas of strength or weakness in a company's financial performance.

A Common Size Income Statement