What is the common denominator for each item on the income statement when preparing a common size income statement?
A) Net income
B) Sales
C) Operating proﬁt
D) Gross proﬁt

Question

Quizplus · Accepted Answer

The common denominator for each item on a common size income statement is sales (or total revenue). This allows for the analysis of each line item as a percentage of total sales, facilitating comparison across periods and with other companies.

What Is the Common Denominator for Each Item on the Income