Question

While preparing Common-size Income Statement, each item of Income Statement is expressed as % of ______.

Options

• Revenue from Operations

• Other Income

• Total Income

• Profit before Tаx

Answer 1

While preparing Common-size Income Statement, each item of Income Statement is expressed as % of revenue from operations.

Explanation:

In a Common-size Income Statement, Revenue from Operations (Net Sales) is taken as the common base and assumed to be 100%. Every other item (like expenses or profits) is divided by this base to see what percentage of core sales revenue it consumes.