An Increase in the Interest Coverage Ratio Indicates Primarily That

question 125

Multiple Choice

An increase in the interest coverage ratio indicates primarily that the corporation's

• A) solvency has improved.
• B) solvency has deteriorated.
• C) liquidity has deteriorated.
• D) liquidity has improved.

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Definitions:

Accounts Receivable

Financial accounting of money owed to a business by its clients or customers for goods or services provided on credit.

Subsidiary Ledger

A subsidiary ledger is a detailed list to support a general ledger account, such as accounts receivable or accounts payable, where individual transactions with entities or items can be tracked.

Supplemental Ledger

Supplemental ledger is an accounting ledger used for keeping detailed information that supports figures stated in the general ledger, providing additional details or breakdowns.