If a Firm Has Substantial Capital or Financing Leases Disclosed

question 26

Multiple Choice

If a firm has substantial capital or financing leases disclosed in the notes but not capitalized in the financial statements, then:

• A) the times interest earned ratio will be overstated, based upon the financial statements
• B) the fixed charge ratio will be overstated, based upon the financial statements
• C) the debt ratio will be understated
• D) the working capital will be understated
• E) none of the answers are correct

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Definitions:

High Consciousness

An elevated state of awareness, including greater focus, alertness, and an expanded sense of connection with one's surroundings or self.

Hypnosis

A trance-like state of focus and concentration achieved with the help of a therapist, used for therapeutic purposes.

Social-Cognitive-Behavior View

A perspective that understanding and changing behavior involved considering social influences, thought processes, and reinforcement history.

Interactive-Phenomenological Perspective

An approach that focuses on understanding human behavior by considering both individual subjective experiences and their interactions with the external world.