The Cash Coverage Ratio Directly Measures the Ability of a Firm's

question 9

Multiple Choice

The cash coverage ratio directly measures the ability of a firm's revenues to meet which one of its following obligations?

• A)payment to supplier
• B)payment to employee
• C)payment of interest to a lender
• D)payment of principle to a lender
• E)payment of a dividend to a shareholder

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Definitions:

Credits

An accounting entry that increases liabilities or equity or decreases assets on a company's balance sheet.

Debits

Debits are accounting entries that increase asset or expense accounts, or decrease liability, equity, or revenue accounts, typically noted on the left side of accounting ledgers.

Dividends Account

An account used to record the payment of dividends, which are distributions of a corporation's earnings to its shareholders.

Expense

Costs incurred in the process of earning revenue, typically including cost of goods sold, selling, general, and administrative expenses.