Question

1 1 2 3 4 as se? 11. Every expense accrual, including payroll, has the same effect and because the expense. 12. When is a company required to record warranty expense? Which of the following bonds are backed only by the borrower's promise to pay? 1 A. Debentures В. Secured bonds C. Mortgage bonds 1. Corporate bonds that can be converted into the issuing company's stock are called of 2. A lease that transfers ownership of the asset to the lessee by the end of the lease term considered a finance lease. True or false? 3. The new FASB standard for measuring and reporting leases requires both finance and operating leases that are longer than fin to be placed on the balance sheet. 4. Capitalizing a lease means to cal What is the equation to calculate the le 5. age ratio? 6 How the times-interest-earned ratio calculated? d r anc 7 What does a high times-interest earned ratio indicate? vев

Answer 1

Answer(1): Option "A" is correct that is Mortgage bonds.

Debentures- Are the bonds that are issued by a company(borrower/issuer) and borrower promises to pay the interest and repayment of loan.

Answer(1): "Covertible bonds" are the corporate bonds that can be converted into common stocks of the company.

Answer(2): True.

A finance lease is the lease where the risk and return get transferred to the lessee. Lessee gets the ownership of the lease before the lease expires.

Answer(5): Leverage Ratio- Are the ratios that tell the debt position in the company.

Debt Equity ratio = Total liabilities / Total Equity

Debt Ratio = Total liabilities / Total Assets

Answer(6): Times interest earned ratio- It is calculated by the following formula:

Times interest earned = EBIT / Interest Expense.

Answer(7): High times interest earned ratio says that company is efficiently paying its interest expenses. Company is very much able to pay its interest expenditures.