Which of the Following Is Used to Calculate Average Assets

question 79

Multiple Choice

Which of the following is used to calculate average assets for the return on assets calculation?

• A)Average assets = (Beginning assets + Ending assets)× 2
• B)Average assets = (Beginning assets - Ending assets)÷ 2
• C)Average assets = (Beginning assets + Ending assets)÷ 2
• D)Average assets = (Beginning assets - Ending assets)× 2

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Definitions:

Compounded

The method of calculating interest where the accumulated interest is added back to the principal sum, so that interest in the next period is then earned on the principal plus previously accumulated interest.

Principal

The original amount of money invested or loaned, before interest.

Compounded

The process of calculating interest on both the initial principal and the accumulated interest from previous periods.

Semi-annually

Occurring twice a year or every six months.