At the End of the Year,a Company Made an Adjusting

question 96

Multiple Choice

At the end of the year,a company made an adjusting entry for prepaid insurance that had expired.Which of the following is true?

• A)Net profit margin ratio will decrease and debt-to-assets ratio will increase.
• B)Net profit margin ratio will increase and debt-to-assets ratio will not change.
• C)Net profit margin ratio will decrease and debt-to-assets ratio will not change.
• D)Net profit margin ratio will not change and debt-to-assets ratio will not change.

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Definitions:

Investment Evaluation

The process of assessing the performance and potential of investment opportunities to inform financial decisions.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to securities laws.

Proxy Statements

Documents containing the information that companies are required to provide to shareholders to solicit proxy votes, including details on matters to be voted on at shareholder meetings.

SEC Registration Statement

A document filed with the U.S. Securities and Exchange Commission by companies intending to issue new securities to the public, providing essential financial information.