76) Contingent liabilities must be recorded if: A) The future event is probable and the amount owed can be reasonably estimated. B) The future event is remote. C) The future event is reasonably possible but not estimable. D) The amount owed cannot be reasonably estimated. E) The future event is probable but not estimable. Answer: 77) In the accounting records of a defendant, lawsuits: A) Are estimated liabilities. B) Should always be recorded. C) Should always be disclosed. D) Should be recorded if payment for damages is probable and the amount can be reasonably estimated. E) Should never be recorded. Answer: 78) The times interest earned ratio reflects: A) A company's ability to pay its operating expenses on time. B) A company's ability to pay interest even if sales decline. C) A company's profitability D) The relation between income and debt E) The relation between assets and liabilities. Answer: 79) Times interest earned is calculated by: A) Multiplying interest expense by income. B) Dividing interest expense by income before interest expense. C) Dividing income before interest expense and income taxes by interest expense. D) Multiplying interest expense by income before interest expense E) Dividing income before interest expense by interest expense and income taxes