Which of the Following Measures Both the Amount of a Firm's

question 92

Multiple Choice

Which of the following measures both the amount of a firm's debt financing and its equity financing?

• A)Times interest earned ratio
• B)Debt to equity ratio
• C)Return on owners' equity
• D)Return on common stockholders' equity

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Definitions:

Income Summary

An account in the ledger that aggregates all income and expense accounts to determine the net profit or loss for a certain period.

Revenue Accounts

Accounts that track the income generated from a company's primary operations and activities.

Expense Accounts

Financial accounts used to track money spent or costs incurred by a business in its operational activities.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, thereby preparing the books for the next period.