Which of the Following Statements Is True

question 95

Multiple Choice

Which of the following statements is true?

• A)Expenses and losses both represent decreases in assets or increases in liabilities; the terms can therefore be used interchangeably.
• B)Expenses and revenues deal with peripheral activities,while losses and gains deal with operating activities.
• C)Expenses and revenues deal with operating activities,while losses and gains deal with peripheral activities.
• D)Revenues and gains both represent increases in assets or decreases in liabilities; the terms can therefore be used interchangeably.

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Definitions:

Debt-to-equity Ratio

This ratio showcases the relative amounts of debt and shareholders' equity employed to support a company's asset investments.

Times Interest Earned Ratio

A financial ratio measuring a company's ability to meet its interest obligations based on current earnings, indicating financial stability.

Net Profit Margin Percentage

A financial metric that shows the percentage of profit a company makes for every dollar of sales, calculated by dividing net profit by total revenue.

Average Sale Period

A financial metric measuring the average time it takes for a company's inventory to turn into sales, often seen as part of inventory turnover analysis.