Question

Commonminussized income statements A. compare companies with the same level of net income. B. assist in the comparison of companies of different sizes. C. compare companies with the same level of total sales. D. show each income statement account as a percentage of total assets.

Answer 1

Answer:

B. assist in the comparison of companies of different sizes.

Explanation:

In the common-size income statements, the items of the income statement are shown in the percentage of the sales. The motive of this statement is to compare the financial statements of the same company for different periods or comparing it by different size companies.  

By comparison, the company gets to know about the liquidity, solvency, financial position, performance, profitability over the past years.