Which of the following statements is correct?
A)Selling inventory at its cost does not affect the net profit margin ratio.
B)Accruing sales revenue does not affect the net profit margin ratio.
C)The total asset turnover ratio increases when fixed assets are sold at a loss.
D)The net profit margin ratio decreases when common stock is issueD.Selling fixed assets at a loss reduces average total assets which is the denominator of the total asset turnover ratio.The total asset turnover ratio will therefore increase.

Question

Quizplus · Accepted Answer

Selling fixed assets at a loss reduces the average total assets, which is the denominator of the total asset turnover ratio. The total asset turnover ratio will, therefore, increase.

Which of the Following Statements Is Correct