Common-size balance sheets are prepared by dividing all quantities by ________.
A) total assets
B) total liabilities
C) shareholders' equity
D) fixed assets

Question

Quizplus · Accepted Answer

Common-size balance sheets are created by expressing each item on the balance sheet as a percentage of total assets. This allows for easy comparison between different companies or different periods for the same company. Dividing by total liabilities, shareholders' equity or fixed assets would not provide the same level of analysis.

Common-Size Balance Sheets Are Prepared by Dividing All Quantities by ________