The Calculation of the Times Interest Earned Ratio Involves Dividing

question 16

Multiple Choice

The calculation of the times interest earned ratio involves dividing

• A)net income by annual interest expense.
• B)net income plus income taxes by annual interest expense.
• C)net income plus income taxes and interest expense by annual interest expense.
• D)none of these.

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Definitions:

Cashier

An employee who handles customer transactions and the management of money in a retail environment, often responsible for processing cash, credit, and other forms of payment.

Bookkeeper

An individual responsible for recording and maintaining a company's financial transactions, such as purchases, sales, receipts, and payments.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash.

December 31

The last day of the year in the Gregorian calendar, commonly associated with the closing of fiscal and calendar year accounts.