Communication of Economic Events Is the Part of the Accounting

question 10

Multiple Choice

Communication of economic events is the part of the accounting process that involves

• A)identifying economic events.
• B)preparing and distributing accounting reports.
• C)quantifying transactions into dollars and cents.
• D)recording and classifying information.

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Definitions:

Book Value

The net value of an asset as recorded on the balance sheet, calculated as the asset's cost minus accumulated depreciation.

Debt-to-equity Ratio

The debt-to-equity ratio is a financial leverage indicator that compares a company's total liabilities to its shareholder equity.

Times Interest

This refers to the times interest earned (TIE) ratio, a financial metric used to measure a company's ability to meet its debt obligations with its earnings before interest and taxes (EBIT).

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets that is financed by stockholders' equity.