An Auditor Is Concerned About Short-Term Interest Payment Obligations Due

question 70

Multiple Choice

An auditor is concerned about short-term interest payment obligations due to a recent major bond issue of the client.A ratio the auditor should consider determining is _________.

• A)debt-equity ratio
• B)quick (acid test) ratio
• C)times interest earned ratio
• D)short term payment ratio

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Definitions:

Probability Sampling

A sampling method where each member of the population has a known, non-zero probability of being selected in the sample.

Sample Proportion

The fraction or percentage of the sample that possesses a certain property or characteristic.

Probability

An indicator of the probability or risk that a certain event will happen, represented by a numerical value ranging from 0 to 1.

Population Mean

The average of a set of numerical values, calculated by summing all the observations and dividing by the total number of observations in the population.