CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Which of the following represents the correct method of constructing common-sized financial statements?
A. All balance sheet items are indexed to total equity while income statement items are indexed to net sales.
B. All balance sheet items are indexed to the total of liabilities and owner's equity while income statement items are indexed to net sales.
C. All balance sheet items are indexed to total assets while income statement items are indexed to gross sales.
Explanation: All balance sheet items are indexed to the total of liabilities and owner's equity - in other words, total assets, while income statement items are indexed to net sales.

User Contributed Comments 6

User Comment
andrewmccusker Total Liabs + Owners Equity = Tot Assets.
BryanKec good call andrew
Joel1980 Ohhh Tricky... Im cracking up here!
davcer Net sales!
ascruggs92 C would be correct if it said net sales. Tricky question
cfastudypl good question AN!
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