Which of the Following Will Not Affect the Calculation of Leverage

question 72

Multiple Choice

Which of the following will not affect the calculation of leverage ratios?

• A)Existence of operating leases
• B)Existence of assets where fair value is much lower than book value
• C)Existence of significant debt covenants
• D)Existence of pension liabilities where projected benefit liability is much greater than plan assets and accumulated benefit obligation

---

Definitions:

External User

Individuals or entities outside of a company who use its financial statements and reports for decision making, such as investors or creditors.

Internal User

Individuals within an organization, such as managers and employees, who use financial information to make decisions related to their roles.

Relevance To Decision

The importance of information in influencing or making a decision; relevant information affects the outcome of the decision-making process.

Management Function

Essential activities including planning, organizing, leading, and controlling that are performed to achieve business objectives.