Answer:
The correct answer is letter "C": Ability of a firm to pay the interest on its debt.
Explanation:
The cash coverage ratio is a metric that measures a company's ability to pay its financial obligations. Generally, the higher the coverage ratio the better for the business to meet its debt obligations. It is best to compare coverage ratios of companies in the same industry or sector in the economy. Comparisons across industries are not useful as companies in different industries use debt in different ways.
Answer:
A) the lessee records an asset and a liability for the present value of lease payments.
Explanation:
In a finance lease, the lessee business must estimate the present value of its obligations under the lease contract (using the lease's interest rate as the discount rate) and record it in the balance sheet as:
- a debit entry under the fixed asset account
- a credit entry under the capital lease liability account
Answer:
Determination of activities,
Grouping of activities,
Allotment of duties to specified persons,
Delegation of authority,
Defining relationships, and.
The co-ordination of various activities.
Auditors would comunicate with the audit committee for critical accounting practices including the significant accounting policies and practices for evaluating certain evidences related to the transaction.
Some of the other communications made to audit committee should be an overall audit strategy with time of the audit and significant risks involved for assessing risks and procedures regarding the transaction.
Auditors are required to solve the financial accounting problems and are not accountable for unusual insignificant transactions and procedures and policies.
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