Which of the Following Is Not Correct Regarding the Rate

question 19

Multiple Choice

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.

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Definitions:

Federal and State Income Tax

Taxes imposed by the federal and state governments on taxable income earned by individuals and corporations.

Federal Insurance Contributions Act

A U.S. law that mandates a payroll tax on the paychecks of employees, as well as contributions from employers, to fund the Social Security and Medicare programs.

Cumulative Gross Earnings

The total gross income earned by an individual or entity before any deductions over a given period.

State Tax Rate

The percentage at which individuals or businesses within a state are taxed by the state government.