ABC Corpshows a Ledger Balance of $50,000 Prior to Writing a a Check

question 72

Multiple Choice

ABC Corp.shows a ledger balance of $50,000 prior to writing a check for $5,000 and depositing $1,000 in checks.What is the amount of its net float?

• A) $1,000
• B) $4,000
• C) $5,000
• D) $6,000

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Definitions:

Times Interest Earned

A ratio that measures creditor margin of safety for interest payments, calculated as income before interest and taxes divided by interest expense.

Income Tax Expense

The total amount of income tax a company reports as an expense in its income statement for a given period.

Interest Expense

The cost incurred by an entity for borrowed funds, representing the interest payments due to lenders or creditors during a specific period.

Current Ratio

A financial metric that evaluates a company's ability to pay off its short-term liabilities with its current assets.