The Debt Ratio Is Calculated as Follows: Total Assets Divided

question 37

True/False

The debt ratio is calculated as follows: total assets divided by total liabilities.

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Definitions:

Creditors

Creditors are individuals or entities to whom a company owes money for goods or services that have been provided.

Asset Account

An account on a company's balance sheet that represents a resource with economic value that an entity owns or controls.

Journal

An official financial record in which transactions are recorded in chronological order before they are transferred to accounts in the general ledger.