Match the Terms with the Definitions

question 43

Multiple Choice

Match the terms with the definitions.
-The ratio of net income for the year to the average assets for the year.

• A)profitability measures
• B)operating income ratio
• C)cost of goods sold ratio
• D)ratio of liabilities to stockholders' equity
• E)return on total assets
• F)ratio of net sales to assets
• G)horizontal analysis
• H)leverage
• I)net income ratio
• J)liquidity
• K)liquidity measures
• L)merchandise inventory turnover

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Definitions:

Leased Asset

An asset that is used by a lessee under the terms of a lease agreement with the lessor, who retains ownership.

Residual Value

The estimated amount that an asset is expected to realize at the end of its useful life, minus any anticipated disposal cost.

Sales-Type Lease

A lease arrangement where the lessor recognizes sales revenue at the inception of the lease, often used in lease agreements for property, plant, and equipment.

Manufacturer's Or Dealer's Profit

The profit margin that a manufacturer or dealer earns from producing or selling goods, typically calculated as the difference between the cost of production and the sale price.