While preparing common-size Balance sheet, each item of Balance sheet is expressed as % of...........
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Total assets or total liability
A common-size balance sheet uses one base for each side: every asset is shown as a percentage of total assets, and every item of equity and liabilities as a percentage of the total of equity and liabilities. Both totals are equal, so each side adds up to 100%.
Why the other options are incorrect
Option (1) Non current assets — Incorrect. Non-current assets are only one part of the assets, so current assets could not be shown against them.
Option (2) Current assets — Incorrect. Current assets are also only a part of the total, not the common base.
Option (3) Non-Current liabilities — Incorrect. These are one group of liabilities; the base is the total of the whole side.
NCERT (2026-27 edition): |