Which of the Following Would Not Be Considered in the Fixed

question 111

Multiple Choice

Which of the following would not be considered in the fixed charge coverage ratio?

• A) sinking fund payments
• B) dividend payments
• C) lease payments Rent payments
• D) rent payments

---

Definitions:

Capital Additions

Investments or expenditures made to acquire or improve long-term assets, enhancing the asset value or extending its useful life.

Net Income

The net income of a business once all taxes, costs, and expenses have been deducted from the total revenue.

Debit Capital Balance

Occurs when the sum of debits in a capital account exceeds the sum of credits, indicating the amount invested by the owners into the business.

Partnership Liquidation

The process of closing a partnership business, including selling off assets, paying off debts, and distributing the remaining assets to the partners.