If Total Assets Decrease but Total Liabilities Remain the Same,what

question 238

Multiple Choice

If total assets decrease but total liabilities remain the same,what is the impact on the debt-to-assets ratio?

• A)It decreases.
• B)It remains the same.
• C)It cannot be determined without additional information.
• D)It increases.

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Definitions:

Prime Costs

The combination of direct material and direct labor expenses incurred in producing a product.

Direct Materials

Raw materials that can be directly traced to the production of finished goods, considered a variable cost and included in the calculation of the cost of goods sold.

Direct Labor

The wages and other compensation paid to employees who are directly involved in the production of goods or services.

Direct Material

Direct material refers to the raw materials that can be directly attributed to the production of goods, essentially part of the finished product.