A Firm Has Total Assets of $800,000 and Total Liabilities

question 58

Multiple Choice

A firm has total assets of $800,000 and total liabilities of $200,000. If profit after tax and interest is $150,000, the return on shareholders' funds is:

• A)25%.
• B)8%.
• C)12.5%.
• D)9%.

---

Definitions:

Worksheet

A worksheet in accounting is a document used for planning adjustments and reconciling accounts, aiding in the preparation of financial statements.

Income Statement

An Income Statement is a financial statement that shows a company's revenues and expenses over a specific period of time, culminating in net profit or loss.

Balance Sheet

An outline that captures a company's assets, debts, and the equity of its shareholders at a distinct point, illustrating the company's financial standing.

Worksheet

An informal document used by accountants to prepare adjusting entries and to reconcile accounts in the preparation of financial statements.