Which of the following choices by a manager would increase net income, total assets and the return on assets ratio?
A)An increase in the allowance for doubtful accounts.
B)The increase in the life of an asset.
C)A decrease in the estimate for warranty expense.
D)The classification of the damage from a flood as an extraordinary item.

Question

Quizplus · Accepted Answer

Increasing the life of an asset decreases the amount of depreciation expense, which increases net income and total assets. Additionally, the return on assets ratio (net income/total assets) would also increase as a result. The other choices would have the opposite effect on these measures.

Which of the Following Choices by a Manager Would Increase