Assets Are Economic Resources Controlled by an Entity as a Result

question 49

True/False

Assets are economic resources controlled by an entity as a result of past transactions or events and for which future economic benefits may be obtained.

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Definitions:

Cash Coverage Ratio

A liquidity ratio that measures a company’s ability to pay off its debt obligations with its cash and cash equivalents.

Tax Rate

The percentage of income or value of a transaction that is required to be paid as tax to a governmental authority.

Interest Paid

The amount paid by a borrower to a lender in compensation for the use of borrowed money, typically expressed as an annual percentage of the principal.

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations based on its current income. It's calculated by dividing earnings before interest and taxes (EBIT) by the interest expenses.