A common-sized balance sheet is prepared by expressing each liability item as a percent of:
A) total sales.
B) total stockholders' equity.
C) total liabilities.
D) total liabilities plus stockholders' equity.

Question

Quizplus · Accepted Answer

A common-sized balance sheet expresses each item as a percentage of total liabilities plus stockholders' equity, providing a way to compare financial statements of companies of different sizes by standardizing the figures.

A Common-Sized Balance Sheet Is Prepared by Expressing Each Liability