The Debt Ratio Is Computed by Dividing

question 130

Multiple Choice

The debt ratio is computed by dividing:

• A)total assets by long-term liabilities.
• B)total assets by total debt.
• C)total debt by total assets.
• D)long-term liabilities by total assets.

---

Definitions:

Process Costing System

An accounting methodology used in industries where production is continuous, assigning costs to units of product based on the process they go through.

Raw Materials Inventory

The stock of basic materials and components that are required in the manufacturing process before they are transformed into finished goods.

Purchase

The acquisition of goods or services in exchange for money, representing a transaction that increases inventory or assets for a business.

Process Costing System

An accounting method used to assign production costs to units of output, typically used in manufacturing environments where products are indistinguishable from one another.