What Does a Ratio Greater Than 1 Indicate

question 18

Multiple Choice

What does a ratio greater than 1 indicate?

• A) Value of interest is smaller than the reference value.
• B) The comparison group is smaller than the value of interest.
• C) The comparison value is greater than the mean value.
• D) Value of interest is greater than the reference value.

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Definitions:

Installment Note

A debt instrument that requires a series of periodic payments of both principal and interest until the debt is paid in full.

Journal Entry

A record in the books of accounts that documents a financial transaction, showing the debit and credit effects.

Interest Expense

Costs incurred by an entity for borrowed funds, which are typically reported on the income statement within the financing or operating sections.

Notes Payable

A written promise to pay a specified amount of money, typically with interest, by a certain date, recorded as a liability on the balance sheet.