Which of the following statements correctly describes the effect of accruing interest revenue at year-end?
A)Income from operations increases.
B)The net profit margin ratio does not change.
C)The total asset turnover ratio increases.
D)The return on assets ratio is affecteD.The accrual of interest revenue increases both total assets and net income, which are the two components of return on assets.

Question

Quizplus · Accepted Answer

The accrual of interest revenue increases both total assets and net income, which are the two components of return on assets. Therefore, the return on assets ratio is affected.

Which of the Following Statements Correctly Describes the Effect of Accruing