Objectives of common-size income statement is/are ________________.

To analyse change in individual items of statement of profit and loss.

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To study the trend in different items of revenues and expenses.

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To assess the efficiency.

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All of the above

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Solution

The correct option is D All of the above
Objectives of common-size income statement are to analyse change in individual items of statement of profit and loss, to study the trend in different items of revenues and expenses and to assess the efficiency of the enterprise.

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The common size income statement defines all items as a percentage of ___

Q. 'To determine the trend of different items of statement', is one of the objectives of common-size statements.

Tanushree Ltd. is in the business of manufacturing cosmetics. Encouraged by the spurt in profits, the Company decided to spend 20 $%$ of its profits to organise clealiness drive in a nearby village. Following particulars are obtained from the Company's books :

$\begin{matrix} Note & 31.03.2017 & 31 st No & March & March 2018 & 2017 Rs & Rs Revenue from Operations & 40, 00, 000 & 25, 00, 000 Purchase of Stock in Trade & 33, 60, 000 & 18, 50, 000 Changes in Inventories & (2, 00, 000) & 1, 50, 000 Other Expenses & 1, 20, 000 & 1, 00, 000 Other Income & 1, 60, 000 & 50, 000 \end{matrix}$

You are required to : (a) Prepare a Common Size Statement of Profit & Loss, and

(b) Identify the value highlighted.

These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as a percentage of that common item.

Q. Common size statement is a ________ for studying the key changes and trends in the financial position and operational result of a company.

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Objectives of common-size income statement is/are ________________.

The correct option is D All of the aboveObjectives of common-size income statement are to analyse change in individual items of statement of profit and loss, to study the trend in different items of revenues and expenses and to assess the efficiency of the enterprise.

The correct option is D All of the above
Objectives of common-size income statement are to analyse change in individual items of statement of profit and loss, to study the trend in different items of revenues and expenses and to assess the efficiency of the enterprise.