Question

State whether the following is True or False:

In a Common size statement each item is expressed as a percentage of some common base.

Answer 1

This statement is true.

Explanation:

In a common‑size statement, each item is shown as a percentage of a single common base (for example, revenue/net sales for the income statement or total assets for the balance sheet), which standardises the figures so they can be compared across periods or between firms.