The Method of Calculating Return on Assets Which Highlights the Importance

question 72

Multiple Choice

The method of calculating return on assets which highlights the importance of sales,profit margin and asset turnover is known as

• A)The sales method
• B)DuPont analysis
• C)The Altman model
• D)The Gordon model
• E)The Return on Assets model

Differentiate between cash basis and accrual basis of accounting.

Explain the significance and calculation of earnings per share (EPS).

Describe the operating cycle and identify businesses with different operating cycle lengths.

Perform transaction analysis, including its effects on the accounting equation and cash flows.

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Definitions:

Direct Labor Costs

Expenses related to employees who directly produce a product or provide a service, such as wages for assembly line workers.

Work in Process Inventory

Inventory that includes materials and labor that are currently in the production process but not yet completed.

Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, reflecting how effectively a company is purchasing materials.

Materials Quantity Variance

A financial metric used in cost accounting to measure the difference between the actual quantity of materials used in production and the expected quantity.