Damon Corporation Has Provided the Following Data from Its Most

question 177

Multiple Choice

Damon Corporation has provided the following data from its most recent balance sheet:

$\begin{array}{lr}\text { Total assets. }&\$ 630,000 \\\text { Total liabilities }&\$ 540,000 \\\text { Total stockholders' equity }&\$ 90,000\end{array}$

The debt-to-equity ratio is closest to:

• A)0.17
• B)6.00
• C)0.86
• D)7.00

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Definitions:

Cash

A form of liquid asset that represents immediate purchasing power and can be used for transactions.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary accounts' balances to permanent accounts, thereby resetting the temporary accounts for the next period.

Revenue Accounts

Accounts that track the income a company generates from its normal business activities, such as sales of goods or services.

Retained Earnings

The portion of a company's profits that is kept or retained rather than paid out as dividends to shareholders, often used for reinvestment in the business.