Question 1

Use the following selected information from Wheeler,LLC to determine the 2015 and 2014 trend percentages for cost of goods sold using 2014 as the base.

Accepted Answer

A) 36.4% for 2015 and 41.1% for 2014. 
B) 55.0% for 2015 and 56.0% for 2014. 
C) 119.4% for 2015 and 100.0% for 2014. 
D) 117.2% for 2015 and 100.0% for 2014. 
E) 65.1% for 2015 and 64.6% for 2014. 
A) 36.4% for 2015 and 41.1% for 2014. 
B) 55.0% for 2015 and 56.0% for 2014. 
C) 119.4% for 2015 and 100.0% for 2014. 
D) 117.2% for 2015 and 100.0% for 2014. 
E) 65.1% for 2015 and 64.6% for 2014.

Question 2

The higher the accounts receivable turnover,the less quickly accounts receivable are collected.

Accepted Answer

A) True 
 B)False

Question 3

The following summaries from the income statements and balance sheets of Kouris Company and Brittania,Inc.are presented below.
(1)For both companies for 2016,compute the:
(a)Current ratio
(b)Acid-test ratio
(c)Accounts receivable turnover
(d)Inventory turnover
(e)Days' sales in inventory
(f)Days' sales uncollected
Which company do you consider to be the better short-term credit risk? Explain.
(2)For both companies for 2016,compute the:
(a)Profit margin ratio
(b)Return on total assets
(c)Return on common stockholders' equity
Which company do you consider to have better profitability ratios?

Accepted Answer

@#IMG-DLM& Brittania has higher current ratios and

Question 4

The measurement of key relationships between financial statement items is known as ________________.

Accepted Answer

The answer of The measurement of key relationships between financial...

Question 5

The ability to generate future revenues and meet long-term obligations is referred to as:

Accepted Answer

A) Liquidity and efficiency. 
B) Solvency. 
C) Profitability. 
D) Market prospects. 
E) Creditworthiness. 
A) Liquidity and efficiency. 
B) Solvency. 
C) Profitability. 
D) Market prospects. 
E) Creditworthiness.

Question 6

All of the following are true of financial statement analysis report,except:

Accepted Answer

A) Contains ambiguities and qualifications. 
B) Forces preparers to organize their reasoning and to verify the logic of analysis. 
C) Serves as a method of communication to users. 
D) Helps users and preparers to refine conclusions based on evidence from key building blocks. 
E) Enables readers to see the process and rationale of analysis. 
A) Contains ambiguities and qualifications. 
B) Forces preparers to organize their reasoning and to verify the logic of analysis. 
C) Serves as a method of communication to users. 
D) Helps users and preparers to refine conclusions based on evidence from key building blocks. 
E) Enables readers to see the process and rationale of analysis.

Question 7

Refer to the following selected financial information from Shakley's Incorporated.Compute the company's profit margin for Year 2.

Accepted Answer

A) 14.1%. 
B) 11.7%. 
C) 9.6%. 
D) 16.7%. 
E) 33.9%. 
A) 14.1%. 
B) 11.7%. 
C) 9.6%. 
D) 16.7%. 
E) 33.9%.

Question 8

A company's sales in Year 1 were $250,000 and in Year 2 were $287,500.Using Year 1 as the base year,the percentage change for Year 2 compared to the base year is:

Accepted Answer

A) 87%. 
B) 100%. 
C) 115%. 
D) 15%. 
E) 13%. 
A) 87%. 
B) 100%. 
C) 115%. 
D) 15%. 
E) 13%.

Question 9

Zhang Company reported Cost of goods sold of $835,000,beginning Inventory of $37,200 and ending Inventory of $46,300.The average Inventory amount is:

Accepted Answer

A) $37,200. 
B) $46,300. 
C) $83,500. 
D) $41,750. 
E) $9,100. 
A) $37,200. 
B) $46,300. 
C) $83,500. 
D) $41,750. 
E) $9,100.

Question 10

Express the following income statement information in common-size percentages (round to nearest whole percent).Comment on the results.

Accepted Answer

@#IMG-DLM& Comments: Although a smaller percent of

Question 11

The current ratio is calculated as current liabilities divided by current assets.

Accepted Answer

A) True 
 B)False

Question 12

The return on total assets can be calculated as profit margin times total asset turnover.

Accepted Answer

A) True 
 B)False

Question 13

The comparison of a company's financial condition and performance across time is known as ____________________.

Accepted Answer

The answer of The comparison of a company's financial condition...

Question 14

Net income divided by average total assets is:

Accepted Answer

A) Profit margin. 
B) Total asset turnover. 
C) Return on total assets. 
D) Days' income in assets. 
E) Current ratio. 
A) Profit margin. 
B) Total asset turnover. 
C) Return on total assets. 
D) Days' income in assets. 
E) Current ratio.

Question 15

Net income divided by net sales is the:

Accepted Answer

A) Return on total assets. 
B) Profit margin. 
C) Current ratio. 
D) Total asset turnover. 
E) Days' sales in inventory. 
A) Return on total assets. 
B) Profit margin. 
C) Current ratio. 
D) Total asset turnover. 
E) Days' sales in inventory.

Question 16

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

Accepted Answer

A) Inventory turnover ratio. 
B) Profit margin. 
C) Days' sales in inventory. 
D) Current ratio. 
E) Total asset turnover. 
A) Inventory turnover ratio. 
B) Profit margin. 
C) Days' sales in inventory. 
D) Current ratio. 
E) Total asset turnover.

Question 17

The dollar change for a comparative financial statement item is calculated by:

Accepted Answer

A) Subtracting the analysis period amount from the base period amount. 
B) Subtracting the base period amount from the analysis period amount. 
C) Subtracting the analysis period amount from the base period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
D) Subtracting the base period amount from the analysis period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis amount,then dividing the result by the base amount. 
A) Subtracting the analysis period amount from the base period amount. 
B) Subtracting the base period amount from the analysis period amount. 
C) Subtracting the analysis period amount from the base period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
D) Subtracting the base period amount from the analysis period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis amount,then dividing the result by the base amount.

Question 18

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The current assets consisted of $62,000 Cash;$43,000 Accounts Receivable;and $88,000 of Inventory.The acid-test (quick)ratio is:

Accepted Answer

A) 1.4:1. 
B) 0.77:1. 
C) 0.54:1. 
D) 1:1. 
E) 0.64:1. 
A) 1.4:1. 
B) 0.77:1. 
C) 0.54:1. 
D) 1:1. 
E) 0.64:1.

Question 19

Annual cash dividends per share divided by market price per share is the:

Accepted Answer

A) Price-earnings ratio. 
B) Price-dividends ratio. 
C) Profit margin. 
D) Dividend yield ratio. 
E) Earnings per share. 
A) Price-earnings ratio. 
B) Price-dividends ratio. 
C) Profit margin. 
D) Dividend yield ratio. 
E) Earnings per share.

Question 20

A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days.

Accepted Answer

A) True 
 B)False

Exam 17: Analysis of Financial Statements

Use the following selected information from Wheeler,LLC to determine the 2015 and 2014 trend percentages for cost of goods sold using 2014 as the base.

The higher the accounts receivable turnover,the less quickly accounts receivable are collected.

The measurement of key relationships between financial statement items is known as ________________.

The ability to generate future revenues and meet long-term obligations is referred to as:

All of the following are true of financial statement analysis report,except:

Refer to the following selected financial information from Shakley's Incorporated.Compute the company's profit margin for Year 2.

A company's sales in Year 1 were $250,000 and in Year 2 were $287,500.Using Year 1 as the base year,the percentage change for Year 2 compared to the base year is:

Zhang Company reported Cost of goods sold of $835,000,beginning Inventory of $37,200 and ending Inventory of $46,300.The average Inventory amount is:

Express the following income statement information in common-size percentages (round to nearest whole percent).Comment on the results.

The current ratio is calculated as current liabilities divided by current assets.

The return on total assets can be calculated as profit margin times total asset turnover.

The comparison of a company's financial condition and performance across time is known as ____________________.

Net income divided by average total assets is:

Net income divided by net sales is the:

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

The dollar change for a comparative financial statement item is calculated by:

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The current assets consisted of $62,000 Cash;$43,000 Accounts Receivable;and $88,000 of Inventory.The acid-test (quick)ratio is:

Annual cash dividends per share divided by market price per share is the:

A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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