Assume JustDoIt Co

question 55

Multiple Choice

Assume JustDoIt Co.increases its operating efficiency such that costs decrease while sales remain constant.As a result,given all else constant,the:

• A)equity multiplier will decrease
• B)return on assets will decrease.
• C)profit margin will decline.
• D)return on equity will increase.
• E)total asset turnover will increase.

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Definitions:

Periodic Inventory System

An inventory accounting system where inventory counts and cost of goods sold calculations are made at set intervals, such as monthly or yearly.

Gross Method

An accounting practice where purchases are recorded at their full invoice amount without deducting any cash discounts.

General Journal Entries

The recordings of financial transactions in the general journal, including both the debit and credit sides of each transaction.

Gross Margin Ratio

Gross margin ratio is a financial metric that measures a company's gross profit relative to its sales revenue, indicating the efficiency of production and pricing strategies.