Assertion (A): In a common-size statement, each item is expressed as a percentage of common base. Reason (R): Common size statements are prepared both in the form of percentages and ratios. In the context of the above two statements, which of the following is correct?

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KollegeApply · Accepted Answer

Only (A) is correct. Explanation: The assertion (A) is correct because in a common-size statement, each item is expressed as a percentage of a common base, such as total assets in the balance sheet or operating revenue in the profit and loss statement.

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