A Division of Shamrock Corporation Reported a Return on Investment

question 120

Multiple Choice

A division of Shamrock Corporation reported a return on investment of 20% for a recent period.If the division's asset turnover was 5,its profit margin must have been

• A)100%
• B)4%
• C)25%
• D)2%

---

Definitions:

Liability Until Earned

Liability Until Earned refers to revenue received in advance of being earned and is recorded as a liability on a company's balance sheet until the service or product is delivered.

Recorded As Revenue

The process of recognizing the amount of money earned from providing goods or services in the financial records during a specific accounting period.

Rental Period

The span of time for which a tenant agrees to rent an asset, such as property or equipment, from a landlord or lessor.

Adjusting Entry

Journal entries made at the end of an accounting period to update accounts for accruals and deferrals not recorded during the period.