In preparing a common-size balance sheet,you express all account balances as a percentage of
A)Total stockholders' equity.
B)Total liabilities.
C)Total assets plus total liabilities minus stockholders' equity.
D)Total assets.

Question

Quizplus · Accepted Answer

In preparing a common-size balance sheet, all account balances are expressed as a percentage of total assets. This allows for a comparison of the different components of the balance sheet and helps to identify trends and changes in the financial position of the company over time. The other options (total stockholders' equity, total liabilities, and total assets plus total liabilities minus stockholders' equity) are not typically used in common-size analysis.

In Preparing a Common-Size Balance Sheet,you Express All Account Balances