What Would Happen to the Asset Turnover Ratio If Additional

question 130

Multiple Choice

What would happen to the asset turnover ratio if additional assets were acquired at the end of 2012 for $2,000 on account?

• A) The asset turnover ratio would decrease.
• B) The asset turnover ratio would increase because no cash was paid.
• C) The asset turnover ratio would have decreased even if this transaction had notoccurred.
• D) The asset turnover ratio would not change because this transaction would not berecorded until 2013.

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Definitions:

Treadwear Number

A numerical rating that indicates the relative durability of a tire's tread, reflecting its expected longevity.

Rim Bead

The edge of a tire that sits tightly against the wheel rim, ensuring an airtight seal.

Valve Stems

Components that protrude from tire rims, allowing for inflation and deflation of tires.

Sidewall

The side part of a tire that extends from the tread to the bead, providing lateral stability and protecting the carcass of the tire.