Compute the Asset Turnover (Rounded to Two Decimal Places) for the Tim

question 42

Multiple Choice

Compute the asset turnover (rounded to two decimal places) for the Tim Tom investment center as shown below. $\begin{array}{ll}&\text { Tim Tom Subsidiary }\\\text { Total sales } & \$ 1,600 \\\text { Operating income } & \$ 100 \\\text { Average assets invested } & \$ 900 \\\text { Profit margin } & ? \\\text { Asset turnover } & ? \\\text { ROI } & ?\end{array}$

• A) 1.78
• B) 0.56
• C) 0.11
• D) 9.00

---

Definitions:

Revenue Recognition

An accounting principle that determines the specific conditions under which revenue is recognized or accounted for.

Sales Agreement

A legal document that outlines the terms and conditions of a transaction between a buyer and a seller for goods or services.

Sales Revenue Approach

A method used in accounting to calculate revenue based on the total value of goods or services sold.

Bad Debts Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect, thus written off as a loss.