Which of the following transactions will decrease both the return on assets ratio and the total asset turnover ratio?

A) Purchasing land by signing a note payable.
B) Accruing interest expense at year-end.
C) Accruing interest revenue at year-end.
D) Collecting cash from an account receivable.

Total Asset Turnover Ratio

An economic indicator that evaluates how effectively a business utilizes its assets to produce sales income.

Return on Assets Ratio

A financial metric indicating how profitable a company is relative to its total assets, calculated by dividing net income by total assets.

Accruing Interest Expense

The process of recording interest expense that has been incurred but not yet paid in the financial statements.