The following information is taken from the financial statements of a company for the current year: On a common size balance sheet,the percentage that should be shown for current assets is closest to

A)100%
B)44%
C)30%
D)33%

Question

The following information is taken from the financial statements of a company for the current year: On a common size balance sheet,the percentage that should be shown for current assets is closest to

A)100% 
B)44% 
C)30% 
D)33%

Quizplus · Accepted Answer

A common size balance sheet expresses each item as a percentage of total assets. Current assets typically include cash, accounts receivable, inventory, and other assets that are expected to be converted into cash within one year. Based on the information given, it is not possible to determine the exact percentage that should be shown for current assets. However, it can be inferred that the percentage would be less than 100% because the balance sheet would also include non-current assets such as property, plant, and equipment. Of the options given, B (44%) is the closest to the typical range for current assets, which is between 30-50% for most companies.

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