A Firm Uses 2011 as the Base Year for Its

Multiple Choice

A firm uses 2011 as the base year for its financial statements.The common-size,base-year statement for 2012 has an inventory value of 1.08.This is interpreted to mean that the 2012 inventory is equal to 108 percent of which one of the following?

A) 2011 inventory
B) 2011 total assets
C) 2012 total assets
D) 2011 inventory expressed as a percent of 2011 total assets
E) 2012 inventory expressed as a percent of 2012 total assets