The Number of Times Interest Charges Are Earned Is Computed

question 36

Multiple Choice

The number of times interest charges are earned is computed as:

• A)net income plus interest expense,divided by interest expense.
• B)income before income tax plus interest expense,divided by interest expense.
• C)net income divided by interest expense.
• D)income before income tax divided by interest expense.

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Definitions:

Contractual Terms

Stipulations, clauses, and conditions outlined in a contract that define the obligations, rights, and duties of the parties involved.

Securities Act Of 1933

A U.S federal law enacted to ensure more transparency in financial statements so investors can make informed decisions about investments, and to establish laws against misrepresentation and fraudulent activities in the securities markets.

Registration Statement

A set of documents, including financial statements and a prospectus, filed with the Securities and Exchange Commission before a company offers securities for sale to the public.

Privity Of Contract

The principle that a contract imposes rights and obligations only on the parties to the contract, and not on any third parties.