Question

In: Accounting

1. Select the correct statement from the following: a.Profit margin reflects a company's ability to produce...

1. Select the correct statement from the following:

a.Profit margin reflects a company's ability to produce net sales from total assets.

b. Total asset turnover reflects the percent of net income in each dollar of net sales.

c. Return on total assets can be separated into gross margin ratio and price-earnings ratio.

d. High returns on total assets are desirable.

e. Return on total assets analysis is beneficial in evaluating a company but is not useful for competitor analysis.

2. Financial statements that show the financial position, results of operations, and cash flows of all entities under the parent company's control, including all subsidiaries are known as:

a.Combined financial statements

b. Consolidated financial statements

c. Equity financial statements

d. Statement of owner's equity

e. Investor financial statements

3. Investments in trading securities:

a. Include only equity securities.

b. Are reported as current assets.

c. Include only debt securities.

d. Are reported at their cost, no matter what their market value.

e. Are long-term investments.

Expert Solution

Solution 1:

The correct statement is "High returns on total assets are desirable"

Hence option d is correct.

Solution 2:

Financial statements that show the financial position, results of operations, and cash flows of all entities under the parent company's control, including all subsidiaries are known as: "Consolidated financial statements"

Hence option b is correct.

Solution 3:

Investments in trading securities "Are reported as current assets."

Hence option b is correct.

ekkarill92 answered 2 years ago

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