If a Retailer Has a Net Profit Margin of 2

question 109

True/False

If a retailer has a net profit margin of 2.0 percent and an asset turnover of 3.0,then its ROA will be 6.0 percent.

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to update account balances to their correct amounts.

Normal Balance

The side (debit or credit) of an account that is normally expected to have a higher balance, indicating its increase.

Financial Statement

A document detailing quantitatively the financial state of a business, covering its balance sheet, income statement, and cash flow statement.

Permanent/Temporary

Categories of accounts in accounting: permanent accounts track long-term financial status, while temporary accounts track revenues, expenses, and dividends over a specific period.