All but one of the following is true of common-size balance sheets.
A) Each asset and liability item on the balance sheet is standardized by dividing it by total assets.
B) Balance sheet accounts are represented as percentages of total assets.
C) Each asset and liability item on the balance sheet is standardized by dividing it by sales.
D) Common-size financial statements allow us to make meaningful comparisons between the financial statements of two firms that are different in size.
Answer: C
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