Question

Which of the following statements is false? Common-size balance sheets allow for comparison of firms with different levels of total assets by introducing a common denominator. The common-size balance sheet reveals the composition of assets within major categories. Each item on a common-size balance sheet is expressed as a percentage of sales. The common-size balance sheet reveals the capital and the debt structure of the firm.

Answer 1

Answer:

Each item on a common-size balance sheet is expressed as a percentage of sales.

Explanation:

In a Common-size balance sheet, the items of the financial statements are presented i.e assets, liabilities and the stockholder equity are reflected in a percentage of the total assets and the total liabilities & owners equity as the case may be.  

Like on numerator side the asset item is there and on the denominator side the total assets are there