Which of the Following Is Not Used in the Calculation

question 143

Multiple Choice

Which of the following is not used in the calculation of the accounting rate of return?

• A)Additional revenues generated by the investment
• B)All additional operating expenses
• C)Amount of the initial investment
• D)Present value of an annuity factor

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Definitions:

Financial Data

Information related to the financial performance of a business, including income, expenses, assets, liabilities, and equity, used for analysis and decision-making.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from its credit sales, calculated by dividing net credit sales by the average accounts receivable.

Sales On Account

Transactions where goods or services are sold with the understanding that payment will be made at a later date, typically recorded as accounts receivable.

Working Capital

Refers to the difference between a company's current assets and current liabilities, indicating its short-term liquidity and ability to fund its operations.