Which of the following transactions would immediately increase a company's return on assets ratio?
A)Received cash from customers for goods sold to them on account last month.
B)Borrowed cash from a local bank.
C)Paid cash on accounts payable.
D)Incurred expenses on account.

Question

Quizplus · Accepted Answer

Paying cash on accounts payable decreases assets, but has no effect on net income. Reducing total asset (the denominator) increases the company's return on assets ratio.

Which of the Following Transactions Would Immediately Increase a Company's