Total Asset Turnover Is Calculated by Dividing

question 96

Multiple Choice

Total asset turnover is calculated by dividing:

• A) Gross profit by average total assets.
• B) Average total assets by gross profit.
• C) Net sales by average total assets.
• D) Average total assets by net sales.
• E) Net assets by total assets.

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Definitions:

Closed

Refers to an account, operation, or period that has been finalized and no longer available for transactions or adjustments.

Posting

The process of transferring the debits and credits from the journal entries to the accounts.

Debit

An entry recorded on the left side of an account ledger, signifying an increase in assets or expenses or a decrease in liabilities, equity, or income.

Unearned Revenue

The liability created by receiving revenue in advance.