Question

The objective of the Common Size Statement of Profit and Loss is not to:

Options

• judge the cost items.

• judge the relative financial soundness of different enterprises.

• present changes in various items of income and expenses.

• establish the relationship between Revenue from Operations and other items of Statement of Profit and Loss.

Answer 1

establish the relationship between Revenue from Operations and other items of Statement of Profit and Loss.

Explanation:

The basic goal of a common Size profit and loss statement is to establish a relationship between Revenue from Operations and other profit and loss items, to display changes in various categories of income and expense, to judge cost items, and so on.