A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

Experience shows that the default rate on liabilities increases sharply when times interest earned falls below 1.5 to 2.0 and remains at that level or lower for several time periods.

Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:

Internal operating activities include research and development, distribution, and human resources.

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

A change in an accounting estimate is:

The time period assumption:

The correct adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31 is:

Profitability is the ability to generate future revenues and meet long-term obligations.

The interest accrued on $7,500 at 6% for 90 days is: (Use 360 days a year.)