Question

QUESTION 13

1. The Return on Assets ratio will increase if the net income of Company B increases $100,000 while the Assets Decrease $100,000.

   True

   False

QUESTION 14

1. A document known as a 501(c)(3) is :

   		A license to raise money
   		proof of not-for-profit status
   		a description of a certain kind of government grant
   		a way for individual donors to hide their true identity

Answer 1

Hi,

A company's Return on Asset tells how much income its assets are generating for company.

Return on Asset = Net Income/Total asset

So net income is directly proportionate to ROA and assets are inversely proportionate.

Hence if net income increases and asset decreases then return on Asset will increase.

So Statement is True.

IN que 14 a 501(c)(3) is a document that allows tax exemptions for non profit organizations.

Hence option 2 is correct here. (proof of not-for -profit status)

Thanks