Which of the following is true about a common size balance sheet?
A)The assets, liabilities, and equities are reported at their market values.
B)The assets, liabilities, and equities are reported as percentages of common stock.
C)The assets, liabilities, and equities are reported as percentages of total assets.
D)The assets, liabilities, and equities are arranged in the alphabetical order.
E)The assets, liabilities, and equities are reported as percentages of the assets, liabilities, and equities of a competing firm.

Question

Quizplus · Accepted Answer

A common size balance sheet reports each line item as a percentage of total assets, allowing for easier comparison of financial data between companies of different sizes. It does not report at market values or as percentages of common stock, and the ordering of the items is based on their classification and importance, not alphabetically. It also does not compare to a competing firm's financial data.

Which of the Following Is True About a Common Size