Examlex

Solved

The Rationale for Adding Back the _______________________________________________________ Relates to Attaining

question 18

Short Answer

The rationale for adding back the _______________________________________________________ relates to attaining consistency in the numerator and denominator of ROA.
Answer:


Definitions:

Account Entry

An accounting record that logs a financial transaction in the books of accounts, impacting the balance sheet and/or income statement.

Debt Ratio

A financial ratio that measures the extent of a company’s leverage, computed by dividing total liabilities by total assets.

Financial Leverage

The use of borrowed funds to increase the potential return of an investment, which also increases the risk.

Posting Reference Column

A column in journals and ledgers where account numbers related to specific transactions are recorded for tracking purposes.

Related Questions