A Debt Ratio of 20% Means That the Firm Is

question 65

True/False

A debt ratio of 20% means that the firm is relying more on borrowed money than owners' equity.

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Definitions:

Unpaid Balance

The remaining amount of money that has not been paid on a loan or debt.

Contingent Liability

A potential financial obligation that depends on a future event that is not certain to happen.

ASPE

Accounting Standards for Private Enterprises; a set of accounting principles and guidelines designed specifically for private companies in Canada.

Accounting Records

Documents and books that systematically capture all financial transactions of a business, serving as the foundation for its financial statements.