Question

QUESTION 11

The debt-to-total assets ratio is primarily a measure of:

		earnings-per-share
		solvency
		profitability
		liquidity

QUESTION 12

Customer satisfaction would be found on:

		the classified balance sheet.
		not on any financial statement.
		the multi-step income statement.
		the statement of retained earnings

QUESTION 13

If total liabilities decreased by $25,000 and stockholders' equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?

		$30,000 increase
		$20,000 increase
		$25,000 increase
		$20,000 decrease

Answer 1

1)OPTION - SOLVENCY.

Debt to total assets ratio is a solvency ratio such that the assets relisable are sufficicient to be paid for the debts at a specific date.

Earnings per share is an overall return to the shareholders per share.

Liquidity ratio is the ratio ro estimate the liquidity position.

2)OPTION - CLASSIFIED BALANCE SHEET.

By looking at the balance sheet the customer/investor get a clear picture of the results and thinks whether to make investment or not.

The other statements like income statement to view the profits/losses of the comapany & Retained Earnings to view the Results of reserves.

3)OPTION - $20,000 Decrease.

From the Accounting Equation = Assets = Liabilities + Equity => Total Assets = $25,000 decrease + $5,000 increase => $20,000 decrease.

If you have any doubts please comment on the answer.