Rearrange the following items in a sequence while preparing common size statement.
(A) Calculate percentage of the total as per common base
(B) Prepare the format of Balance sheet and Profit and Loss A/c
(C) List out absolute figures in rupees at two points of time
(D) Choose a common base
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (B), (C), (D), (A)
A common size statement shows every item as a percentage of one common base (revenue from operations for the statement of profit and loss, total assets or total liabilities for the balance sheet). The work follows a natural order:
(B) Prepare the format of Balance sheet and Profit and Loss A/c — first the columns of the statement are laid out.
(C) List out absolute figures in rupees at two points of time — the rupee figures of the two years are entered.
(D) Choose a common base — the total that is to be taken as 100 is fixed.
(A) Calculate percentage of the total as per common base — each item is then worked out as a percentage of that base.
So the order is (B), (C), (D), (A). The percentage cannot be worked out before the base is chosen, and the base cannot be chosen before the figures are listed.
NCERT (2026-27 edition):
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