The following information is taken from the financial statements of a company for the current year: On a common size income statement for this year,what is the percentage that would be shown for cost of goods sold?

A)76%
B)24%
C)31%
D)18%

Question

The following information is taken from the financial statements of a company for the current year: On a common size income statement for this year,what is the percentage that would be shown for cost of goods sold?

A)76% 
B)24% 
C)31% 
D)18%

Quizplus · Accepted Answer

Cost of goods sold is typically one of the largest expenses on an income statement, often accounting for the majority of a company's expenses. Therefore, it is likely that the percentage shown for cost of goods sold on a common size income statement would be high. Option A is the highest percentage listed and is therefore the best choice.

The Following Information Is Taken from the Financial Statements of a Company