What would happen to the asset turnover ratio if additional assets were acquired at the end of 2012 for $2,000 on account?
A) The asset turnover ratio would decrease.
B) The asset turnover ratio would increase because no cash was paid.
C) The asset turnover ratio would have decreased even if this transaction had notoccurred.
D) The asset turnover ratio would not change because this transaction would not berecorded until 2013.

Question

Quizplus · Accepted Answer

Acquiring additional assets would increase the total assets, while the revenue would remain the same. This means that the asset turnover ratio (revenue divided by total assets) would decrease because the company is generating the same amount of revenue with more assets.

What Would Happen to the Asset Turnover Ratio If Additional