What is a common-size income statement? a) A statement that expresses each item on the income...

Question:

What is a common-size income statement?

a) A statement that expresses each item on the income statement as a percentage of total assets.

b) An income statement that provides intermediate profit measures.

c) An income statement that groups all items of revenue together, then deducts all categories of expenses.

d) A statement that expresses each item on the income statement as a percentage of net sales or revenues.

Income Statement:

An income statement is one of the three main financial statements prepared by companies. It consists of total revenue, expenses, and net income (loss) for a period of time.

Answer and Explanation:

Answer choice d) A statement that expresses each item on the income statement as a percentage of net sales or revenues.

Explanation:

Ina common-size income statement each item on the income statement is divided by net sales or revenue to determine a percentage. Examples of items on the income statement is expenses and net income.


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What Is an Income Statement? - Purpose, Components & Format

from Accounting 101: Financial Accounting

Chapter 2 / Lesson 2
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