The Times Interest Earned Ratio Is Computed by Dividing

question 199

Multiple Choice

The times interest earned ratio is computed by dividing

• A) net income by interest expense.
• B) income before income taxes by interest expense.
• C) income before interest expense by interest expense.
• D) income before income taxes and interest expense by interest expense.

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Definitions:

Payroll Register

A document that records details about employees' pay for each pay period, including gross salary, deductions, and net salary.

Federal Income Tax

A tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Quarterly Returns

Financial reports generated every three months by companies to provide insights into their financial health, performance, and operational activities.

Pay Schedule

A list showing how often an employee is paid, such as weekly, biweekly, or monthly.