Multiple Choice Questions on While preparing a common size Balance Sheet each item of the Balance Sheet is expressed as a percent........... for Common University Entrance Test (CUET) Preparation

While preparing a common size Balance Sheet each item of the Balance Sheet is expressed as a percent...........

Accountancy (CUET) Analysis of Financial Statements

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While preparing a common-size Balance Sheet, each item of the Balance Sheet is expressed as a percentage of:

This questions was previously asked in

CUET ACCOUNTANCY Previous Year Paper (2022)

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Non-current assets

Current assets

Non-current liabilities

Total assets or total liabilities

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Explanation:

Solution and Explanation:

A common-size Balance Sheet is a financial statement where all items are presented as a percentage of a base amount to facilitate analysis and comparison.

In a common-size Balance Sheet, the base amount is either Total Assets or Total Liabilities.
This method helps in analyzing financial positions across different periods or companies, as it standardizes the figures.
Each asset item is expressed as a percentage of Total Assets, and each liability item is expressed as a percentage of Total Liabilities.

Thus, the correct answer is:
(D) Total assets or total liability.