Which of the Following Ratios Would Be the Best Measure

question 65

Multiple Choice

Which of the following ratios would be the best measure of profitability?

• A) Current ratio
• B) Debt-to-equity ratio
• C) Times-interest-earned ratio
• D) Return on assets

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Definitions:

Bank Service Charges

Fees charged by banks for various account and transaction services provided to customers.

Bank Reconciliation

The process of matching and comparing figures from accounting records against those shown on a bank statement to ensure accuracy and consistency.

Journal Entries

The record of all financial transactions in the double-entry bookkeeping system of a company, each entry consisting of a debit and credit.

Credit Memos

Documents issued by a seller to a buyer, reducing the amount that the buyer owes to the seller under previous agreements.