9) Calculating the debt-to-assets ratio measures how efficiently a company is using its assets in the normal scope of business.

true false

10) In a market, creditors are resource providers.

true false

11) A high debt-to-asset ratio may indicate that a company has a high level of debt risk.

true false

12) Manhattan Company recorded an adjusting entry to accrue interest owed of $300 as of December 31, Year 1. When the related note was paid during Year 2, the company paid $450 in interest. Which of the following journal entries correctly records this Year 2 transaction? (Assume that the entry to record the payment of the note itself was recorded in a separate journal entry.)

A)

Interest expense	150
Cash		150

B)

Interest expense	450
Cash		450

C)

Interest expense	150
Interest payable	300
Cash		450

D)

Interest expense	450
Cash		300
Interest payable		150

13) The stockholders of a business have a priority claim to its assets in the event of liquidation.

true false