Question

In: Accounting

We can look at a common form balance sheet by normalizing all entries against the key...

We can look at a common form balance sheet by normalizing all entries against the key driver of balance sheet line items, which is/are?

Liabilities

Assets

Sales

Shareholders' Equity

Solutions

Expert Solution

Financial Statements that show only percentages and not absolute amount are known as common size statements. All percentage figures in a common size balance sheet are percentage of the total assets while the figures in the common size Income statement are percentage of net sale.The use of common size statements facilitates vertical analysis of company financial statements.

Option B is the correct answer ( Assets ).


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