Which of the Following Is the Formula Used to Calculate

question 27

Multiple Choice

Which of the following is the formula used to calculate the debt ratio?

• A) Total Equity/Total Liabilities.
• B) Total Liabilities/Total Equity.
• C) Total Liabilities/Total Assets.
• D) Total Assets/Total Liabilities.
• E) Total Equity/Total Assets.

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Definitions:

Accrued Interest

Income from interest that has been accrued but neither received nor documented in the financial records.

Paying

The process of distributing money in exchange for goods, services, or to settle debts.

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditures to the correct periods.

Seller

An individual or entity that offers goods or services in exchange for payment.