Match each of the following terms with the appropriate definitions.
-A calculation of a company's risk of its ability to pay interest when due.
A)Short-term note payable
B)Deferred income tax liability
C)Current liabilities
D)Warranty
E)Employee benefits
F)Federal depository bank
G)Payroll register
H)Gross pay
I)Payroll bank account
J)Times interest earned

Question

Quizplus · Accepted Answer

Times interest earned is a financial ratio that compares a company's income before interest and taxes (EBIT) to its interest expenses. This ratio measures a company's ability to meet its interest obligations, thus reflecting its risk of being able to pay interest when due.

Match Each of the Following Terms with the Appropriate Definitions