Posted: July 10th, 2016

Debtors are interested in the times-interest-earned ratio because they want to?

The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.

a. True
b. False

The percent of fixed assets to total assets is an example of

a. solvency analysis
b. horizontal analysis
c. profitability analysis
d. vertical analysis

Debtors are interested in the times-interest-earned ratio because they want to

a. know the tax effect of lending to a corporation
b. have adequate protection against a potential drop in earnings jeopardizing their interest payments
c. be sure their debt is backed by collateral
d. know what rate of interest the corporation is paying

An example of a period cost is:

a. property taxes on plant facilities
b. advertising expense
c. depreciation on factory equipment
d. indirect materials

Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $110,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

a. $150,000.
b. $102,000.
c. $110,000.
d. $118,000.