Which of the following item is assumed to be 100 while preparing a common size statement of Profit and Loss?
Answer & explanation
Correct answer: option 1
The correct answer is option 1-Reveue from operations.
The following procedure may be adopted for preparing the common size statements.
1. List out absolute figures in rupees at two points of time, say year 1, and year 2
2. Choose a common base (as 100). For example, revenue from operations may be taken as base (100) in case of statement of profit and loss and total assets or total liabilities (100) in case of balance sheet.