The Financial Statements of Proprietary Funds Are Similar to Business

question 30

Multiple Choice

The financial statements of proprietary funds are similar to business enterprises with the exception that proprietary funds do not

• A)report fixed assets.
• B)report property taxes.
• C)separate current and noncurrent assets.
• D)report noncurrent liabilities.

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Definitions:

Times Interest Earned Ratio

A financial metric assessing a company's ability to meet its interest obligations from operating earnings.

Inventory Turnover

A measure of how quickly a company sells its stock of goods in a period, calculated by dividing the cost of goods sold by the average inventory level.

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets that are financed by shareholders' equity.

Debt-to-equity Ratio

The ratio that demonstrates the comparative financing from shareholders' equity and debt for a company's assets.