Which of the Following Groups of Ratios Measure a Company's

question 99

Multiple Choice

Which of the following groups of ratios measure a company's ability to pay its current liabilities?

• A)Current ratio, acid-test ratio and the times-interest-earned ratio
• B)Current ratio and acid-test ratio
• C)Current ratio and times-interest-earned
• D)Current ration and debt ratio

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Definitions:

Withholding Allowance

A claim made by employees on the W-4 form to reduce the federal income tax withheld from their paycheck.

Taxable Income

The portion of an individual's or business's income that is subject to income tax, after exemptions and deductions.

Taxable Income

The amount of an individual's or entity's income used to determine how much tax is owed, calculated as gross income minus deductions and exemptions.

Monthly Salary

The amount of money an employee is paid each month for their job performance, not including bonuses or overtime pay.