At the End of the Year, a Company Made a Deferral

question 135

Multiple Choice

At the end of the year, a company made a deferral adjusting entry to recognize the expiration of prepaid insurance. 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:

Mean Age

The average age of individuals in a particular group, calculated by summing their ages and dividing by the number of individuals.

Psychosocial Task

A challenge or duty that relates to an individual’s psychological development in, and interaction with, a social environment.

Identity

The qualities, beliefs, personality, appearance, and culture that make a person or group who they are.

Erikson

A psychologist known for his theory on the psychosocial development of human beings.