The Balance Sheets at the End of Each of the First

question 86

Multiple Choice

The balance sheets at the end of each of the first two years of operations indicate the following:
If net income is $150,000 and interest expense is $20,000 for Year 2, what is the rate earned on total assets for the year?

• A) 10.4%
• B) 11.9%
• C) 10.5%
• D) 8.4%

---

Definitions:

Selling and Administrative Expenses

Costs incurred by a company not directly tied to the production of goods or services, including sales, marketing, and administrative functions.

Units

The basic measure of quantity in accounting, production, or inventory, often representing a single item or instance of a product.

Spending Variance

The difference between the actual amount spent and the budgeted or forecasted amount for a particular account or period.

Occupancy Expenses

Costs associated with occupying a space, such as rent, utilities, and property taxes.