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.

---

Definitions:

Public Good

A good that is both nonexcludable and nonrival in consumption.

Fire Protection

A range of measures and services designed to minimize the impact of fire on people, property, and the environment.

Private Good

A good that is both excludable and rival in consumption.

Ice-Cream Cone

A sweet frozen dessert made from dairy and sugar, often served in a cone-shaped pastry or wafer.