Question :
81. Which of the following results in an increase in the : 1228507
81. Which of the following results in an increase in the return on assets ratio?
A. A decrease in the asset turnover ratio.
B. An increase in the net profit margin ratio.
C. Purchasing a building by signing a long-term mortgage payable.
D. Using cash to purchase land.
82. Marino Company has provided the following information:
? Net sales, $480,000
? Net income, $24,000
? Average total assets, $200,000
What is Marino’s net profit margin ratio?
A. 75%
B. 12%
C. 42%
D. 5%
83. Marino Company has provided the following information:
? Net sales, $480,000
? Net income, $24,000
? Average total assets, $200,000
What is Marino’s asset turnover ratio?
A. 12.0
B. 8.33
C. .42
D. 2.4
84. Marino Company has provided the following information:
? Net sales, $480,000
? Net income, $24,000
? Average total assets, $200,000
What is Marino’s return on assets ratio?
A. 240%
B. 12%
C. 5%
D. 42%
85. Which of the following transactions will decrease both the return on assets ratio and the asset turnover ratio?
A. Purchasing land by signing a note payable.
B. Accruing interest expense at year-end.
C. Accruing interest revenue at year-end.
D. Collecting cash from an account receivable.
86. Which of the following statements is false?
A. A decrease in the asset turnover ratio results in a decrease in the return on assets ratio.
B. An increase in average total assets results in a decrease in both the asset turnover ratio and return on assets ratio.
C. A decrease in the asset turnover ratio results in a decrease in the net profit margin ratio.
D. An increase in the net profit margin ratio results in an increase in the return on assets ratio.
87. Which of the following statements is true?
A. A decrease in net income decreases both the net profit margin ratio and the asset turnover ratio.
B. An increase in average total assets results in a decrease in both the asset turnover ratio and the net profit margin ratio.
C. A decrease in average total assets results in an increase in the asset turnover ratio and a decrease in the net profit margin ratio.
D. An increase in net income increases both the net profit margin ratio and the return on assets ratio.
88. Which of the following would most likely increase the net profit margin ratio?
A. An increase in the unit selling price.
B. A decrease in the overall sales volume.
C. An increase in operating expenses.
D. An increase in cost of goods sold.
89. Which of the following is true?
A. An extraordinary gain would increase income before taxes.
B. Discontinued operations would be shown as a component of continuing operations on the income statement.
C. Discontinued operations are shown on the income statement net of income tax effects.
D. Results from discontinued operations may be used to predict future company results.
90. Polk Company suffered a loss from earthquake damage at its plant in Nebraska. The loss meets the criteria for an extraordinary item. Where will the company present the extraordinary item on the income statement?
A. As a component of income from continuing operations.
B. As a component of gross profit.
C. After income from continuing operations but before net income.
D. Prior to income from continuing operations before taxes.
91. Which of the following statements regarding international financial reporting standards (IFRS) is false?
A. The reporting of extraordinary items is prohibited.
B. Property, plant, and equipment can be reported on the balance sheet at either fair value or historical cost.
C. The last-in first-out inventory method is permitted.
D. Inventory write-downs are permitted.
92. Which of the following statements does not accurately describe the affect of the sale of inventory at a profit on the financial statements?
A. Income from operations and current assets both increase.
B. Operating income and gross profit both increase.
C. Net income and earnings per share both increase.
D. Current assets don’t change and stockholders’ equity increases.
93. Which of the following statements regarding international financial reporting standards (IFRS) is false?
A. Research and development costs are expensed.
B. Research costs are expensed and development costs are capitalized.
C. Cash payments for interest are reported on the cash flow statement either an operating or financing cash flow.
D. Reversal of inventory write-downs is permitted.
94. Which of the following statements is correct?
A. Income from operations increases when common stock is sold for more than par value.
B. The accrual of research and development costs does not affect the net profit margin ratio.
C. The payment of an accrued liability decreases asset turnover.
D. The declaration and payment of a cash dividend increases the return on assets ratio.
95. Which of the following statements correctly describe the effect of accruing interest revenue at year-end?
A. Income from operations increases.
B. The net profit margin ratio does not change.
C. The asset turnover ratio increases.
D. The return on assets ratio is affected.
