A Company Reports Total Assets of $525,000 and Stockholders' Equity

question 43

Multiple Choice

A company reports total assets of $525,000 and stockholders' equity of $395,000. Which of the following is the debt ratio?

• A) 0.29
• B) 0.71
• C) 0.55
• D) 0.25

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Definitions:

Induction

A reasoning process that involves making generalizations based on specific observations or instances.

Deduction

A logical process in which a conclusion follows necessarily from the stated premises, implying the truth of the conclusion if the premises are true.

Reasoning

The process of thinking about something in a logical way in order to form a conclusion or judgment.

Judgment

The process of extrapolating from evidence to draw conclusions.