7 Which of the following statements provide(s) an argumentin favour of including only a plant's net book value ratherthan gross book value as part of operating assets in theROI computation?I. Net book value is consistent with how plant andequipment items are reported on a balance sheet.II. Net book value is consistent with the computation ofoperating income, which includes amortization as anoperating expense.III. Net book value allows ROI to decrease over time asassets get older.Select one:Оa. I only.b. I and III only.c. III only.d. I and II only.

Option a: This option is incorrect because, although statement I is correct, it is not the best and…

Answered: Which of the following statements…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 12MCQ: Which of the following statements is true? a. The fixed asset turnover ratio assists managers in...

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Similar questions

Record the entry to adjust asset values to fair value. Record the entry to reduce additional paid in capital balance to correct figure, to close out gain account, and to eliminate deficit. How do I do this? What part of this is the adjust asset value and what part is the deficit entry
Historical cost is based on actual, not merely possible, transactions. It is the acquisition price of the assets. The managers only have to record all the assets and liabilities at their acquisition price. This results in; a. Less manipulations in financial statements b. surviving test of time c. making relevant economic decisions d. None
Which of the following statements is true? a. The fixed asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the fixed assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the fixed asset turnover ratio will decrease. d. A relatively low fixed asset turnover ratio signals that a company is efficiently using its assets.
What provides the framework for conducting return on assets (ROA) analysis by incorporating revenues and expenses to generate net profit margin, as well as inclusion of assets to measure asset turnover?
Which of the following is accounted for as a change in accounting policy? A. A change in the estimated useful life of property, plant and equipmentB. A change from cash basis to accrual basis of accountingC. A change from expensing immaterial expenditures to deferring and amortizing them when material.D. A change in inventory valuation from FIFO to average method
Find the attached file.
Why is depreciation provided on non-current assets? а. so that the business entity concept is applied O b. so that there is enough cash in the business to replace them O c. so that the cost is allocated to periods that benefit from them O d. so that they are shown at market value
Which of the following is NOT correct regarding the rate of return on assets? a. The rate of return on assets measures management’s ability to productively employ all its resources. b. The rate of return on assets measures the return on all assets used regardless of how the assets are financed. c. The rate of return on assets is a measure of profitability. d. The rate of return on assets measures the return on the investment made by the owners of the entity. is B the correct answer?
7. How is the valuation of current assets affected if the company follows IFRS? Valuation is based on historical cost. OValuation is based on market adjustments. OValuation is based on LCM accounting. O Assets are expensed immediately.
Which of the following is not an asset utilization ratio? Group of answer choices... a. Return on assets b. Average collection period c. Fixed asset turnover d.Inventory turnover
While calculating operating profit which will not be added back to net profit a. Preliminary Expenses Written off b. Depreciation c. Loss on Sale of Asset d. Rent Expenses
Assets are usually valued at? a.Historical Cost b. Residual Value c. Net Realizable Value d. Replacement Cost

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