Total Asset Turnover Is Used to Evaluate

question 21

Multiple Choice

Total asset turnover is used to evaluate:

• A)The efficient use of assets to generate sales.
• B)The necessity for asset replacement.
• C)The number of times operating assets were sold during the year.
• D)The cash flows used to acquire assets.
• E)The relation between asset cost and book value.

---

Definitions:

Cost of Goods Sold

Costs directly linked to creating goods for sale within a business, such as labor and materials.

Net Income

The profit of a company after all expenses and taxes have been deducted from total revenue.

Perpetual Inventory System

An inventory management system where inventory levels are updated in real-time with each sale or purchase, providing a continuous record of inventory counts.

Periodic Inventory System

An inventory system that updates inventory balances after a set period by taking a physical inventory count.