Series 79 practice questionmediumCommon-size Statements
When preparing a common-size income statement, each line item is typically expressed as a percentage of:
- ATotal assets
- BNet income
- CTotal equity
- DTotal revenue✓ Correct answer
Explanation
Why D — Total revenue
On a common-size income statement, all items are shown as a percentage of total revenue, which allows comparability across companies and periods. Total assets and equity are used for balance sheet common-size statements.
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