Post ACC305 Unit 5 Chapter 7 Quiz

| September 28, 2018

QUESTION 1All but which of these ratios are considered to be debt ratios?Times interest earnedDebt RatioFixed charge ratioCurrent Ratio1 points QUESTION 2In computing the debt ratio, which of the following is subtracted in the denominator?TrademarksPatentsMarketable SecuritesNone of the above.1 points QUESTION 3Which of the following ratios can be used as a guide to a firm’s ability to carry debt from an income perspective?Times interest earnedDebt/equityDebt to tangible net worthDebt ratio1 points QUESTION 4In computing debt to tangible net worth, which of the following is not subtracted in the denominator?PatentsLandGoodwillTrademarks1 points QUESTION 5Under the Employee Retirement Income Security Act, a company can be liable for its pension plan up to30% of its net worth30% of pension liabilites30% of liabilities40% of its net worth1 points QUESTION 6Match the five ratios with their formulas. – A. B. C. D. E. times interest earned – A. B. C. D. E. fixed charge coverage – A. B. C. D. E. debt ratio – A. B. C. D. E. debt/equity ratio – A. B. C. D. E. debt to tangible net worthA.Total LiabilitiesShareholders’ Equity – Intangible AssetsB.Total LiabilitiesTotal AssetsC.Recurring Earnings, ExcludingInterest Expense, Tax Expense,Equity Earnings, and Minority ExpenseInterest Expense, IncludingCapitalized InterestD.Recurring Earnings, ExcludingInterest Expense, Tax Expense,Equity Earnings, and Minority Earnings+ Interest Portion of RentalsInterest Expense, includingCapitalized Interest + InterestPortion of RentalsE.Total LiabilitiesShareholders’ Equity

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