Return on Assets Is Always a Larger Number Than the Return

question 25

True/False

Return on assets is always a larger number than the return on equity.

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Definitions:

Cost of Goods Sold

Costs incurred directly by the production process of goods a company sells, covering both materials and labor.

Unearned Rent Revenue

Payments received by a property owner for rent that are not yet considered earned income, as the rental period they apply to has yet to elapse.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial position.

Income Summary

A temporary account used in accounting to summarize all income and expenses for a period, closing the books and preparing them for the next period.