The Accounting Rate of Return Method Focuses on Net Operating

question 10

True/False

The accounting rate of return method focuses on net operating income instead of net cash inflow generated by an asset.

---

Definitions:

Parent

The entity that controls one or more subsidiaries through ownership of the majority of voting rights or through other means.

Subsidiary

A company that is controlled by another company, known as the parent company, through the ownership of more than half of its voting stock or through other means of control.

Intangible Assets

Assets that lack physical substance but provide economic benefits to a company, such as trademarks, patents, and copyrights.

Impairment

The reduction in the recoverable value of an asset below its carrying amount on the balance sheet.