When a Company Records Fictitious Revenues, What Is the Effect

question 36

Multiple Choice

When a company records fictitious revenues, what is the effect on asset turnover ratio?

• A) The ratio increases
• B) The ratio decreases
• C) No effect
• D) The ratio might increase or decrease depending upon the transaction

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Definitions:

Economic Growth

An increase in a country's output of goods and services over time, typically measured by changes in real GDP, indicating improvements in living standards and economic health.

Capital

Assets or resources that are available for use in the production of further assets or goods.

Entrepreneurial Ability

The skill or capacity to identify opportunities, create new businesses, and innovate new products or services in the marketplace.

Opportunity Cost

represents the value of the next best alternative forgone as a result of making a decision.