Question 1

Which one of the following would be considered a long-term solvency ratio?

Accepted Answer

A)  Accounts receivable turnover 
B)  Return on assets 
C)  Current ratio 
D)  Debt to assets ratio 
A)  Accounts receivable turnover 
B)  Return on assets 
C)  Current ratio 
D)  Debt to assets ratio

Question 2

If Year 1 equals $700, Year 2 equals $840, and Year 3 equals $630, the percentage to be assigned for Year 1 in a trend analysis, assuming that Year 1 is the base year, is

Accepted Answer

A)  100%. 
B)  90%. 
C)  111%. 
D)  120%. 
A)  100%. 
B)  90%. 
C)  111%. 
D)  120%.

Question 3

Chodron Corporation had net credit sales of $13,000,000 and cost of goods sold of $9,250,000 for the year. The average inventory for the year amounted to $1,250,000. The inventory turnover for the year is

Accepted Answer

A)  7.4 times. 
B)  10.4 times. 
C)  3.0 times. 
D)  1.4 times. 
A)  7.4 times. 
B)  10.4 times. 
C)  3.0 times. 
D)  1.4 times.

Question 4

The ______________ ratio measures the percentage of earnings distributed in the form of cash dividends.

Accepted Answer

The answer of The ______________ ratio measures the percentage of...

Question 5

Which of the following would not be considered an example of a discontinued operation?

Accepted Answer

A)  Shifting production processes within an operation 
B)  Elimination of a major class of customers 
C)  Elimination of an entire activity 
D)  Disposal of a significant component of a business 
A)  Shifting production processes within an operation 
B)  Elimination of a major class of customers 
C)  Elimination of an entire activity 
D)  Disposal of a significant component of a business

Question 6

Match the ratios with their formulas by entering the appropriate letter in the space provided. 
-
Current assets/Current liabilities

Accepted Answer

A) Current ratio 
B) Price-earnings ratio 
C) Profit margin 
D) Asset turnover 
E) Earnings per share
F)Times interest earned
G)Inventory turnover
H)Average collection period
I)Days in inventory
J)Payout ratio 
A) Current ratio 
B) Price-earnings ratio 
C) Profit margin 
D) Asset turnover 
E) Earnings per share
F)Times interest earned
G)Inventory turnover
H)Average collection period
I)Days in inventory
J)Payout ratio

Question 7

Alternative accounting methods affect the quality of earnings.

Accepted Answer

A) True 
 B)False

Question 8

Rama Company reported the following on its income statement: $\begin{array}{ll}
\text { Income before income taxes } & \$ 500,000 \
\text { Income tax expense } & 150,000 \
\text { Net income } & \$ 350,000
\end{array}$ An analysis of the income statement revealed that interest expense was $80,000. Rama Company's times interest earned was

Accepted Answer

A)  5.4 times. 
B)  7.3 times. 
C)  6.3 times. 
D)  4.4 times. 
A)  5.4 times. 
B)  7.3 times. 
C)  6.3 times. 
D)  4.4 times.

Question 9

Horizontal analysis (trend analysis) percentages for Omega Company's sales, cost of goods sold, and expenses are listed here.   Instructions
Explain whether Omega's net income increased, decreased, or remained unchanged over the 3-year period.

Accepted Answer

Comparing the percentages presented resu

Question 10

Discontinued operations refers to the disposal of a __________________ of a business.

Accepted Answer

significan

Question 11

Here is financial information for Valdez Express Inc.   Instructions
Prepare a schedule showing a horizontal analysis for 2017 using 2016 as the base year.

Accepted Answer

The answer of Here is financial information for Valdez Express...

Question 12

State the effect of the following transactions on the current ratio. Use increase, decrease, or no effect for your answer.
(a) Collection of an accounts receivable
(b) Declaration of cash dividends
(c) Additional stock is sold for cash
(d) Accounts payable are paid
(e) Equipment is purchased for cash
(f) Inventory purchases are made for cash
(g) Temporary investments are purchased for cash

Accepted Answer

(a) no effect
(b) de

Question 13

Vertical analysis (common-size) percentages for Austin Company's sales, cost of goods sold, and expenses are listed here.   Did Austin Company's net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period? Provide numerical support for your answer.

Accepted Answer

@#IMG-DLM& *(Sal. rev. % − COGS% − oper. exp.%)
Ne

Question 14

Which one of the following would not be considered a liquidity ratio?

Accepted Answer

A)  Current ratio 
B)  Inventory turnover 
C)  Average collection period 
D)  Return on assets 
A)  Current ratio 
B)  Inventory turnover 
C)  Average collection period 
D)  Return on assets

Question 15

Under IFRS, the components of other comprehensive income can be reported in each of the following ways except

Accepted Answer

A)  the one-statement approach. 
B)  the two-statement approach. 
C)  the statement of stockholders' equity approach. 
D)  All of the above are acceptable. 
A)  the one-statement approach. 
B)  the two-statement approach. 
C)  the statement of stockholders' equity approach. 
D)  All of the above are acceptable.

Question 16

In a common size income statement, each item is expressed as a percentage of net income.

Accepted Answer

A) True 
 B)False

Question 17

A liquidity ratio measures the

Accepted Answer

A)  income or operating success of an enterprise over a period of time. 
B)  ability of the enterprise to survive over a long period of time. 
C)  short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash. 
D)  number of times interest is earned. 
A)  income or operating success of an enterprise over a period of time. 
B)  ability of the enterprise to survive over a long period of time. 
C)  short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash. 
D)  number of times interest is earned.

Question 18

In a common size balance sheet, the 100 percent figure is

Accepted Answer

A)  total current assets. 
B)  total property, plant and equipment. 
C)  total liabilities. 
D)  total assets. 
A)  total current assets. 
B)  total property, plant and equipment. 
C)  total liabilities. 
D)  total assets.

Question 19

Match the ratios with their formulas by entering the appropriate letter in the space provided. 
-
Income before income taxes and interest expense/Interest expense

Accepted Answer

A) Current ratio 
B) Price-earnings ratio 
C) Profit margin 
D) Asset turnover 
E) Earnings per share
F)Times interest earned
G)Inventory turnover
H)Average collection period
I)Days in inventory
J)Payout ratio 
A) Current ratio 
B) Price-earnings ratio 
C) Profit margin 
D) Asset turnover 
E) Earnings per share
F)Times interest earned
G)Inventory turnover
H)Average collection period
I)Days in inventory
J)Payout ratio

Question 20

From a creditor's point of view, the higher the debt to assets ratio, the lower the risk that the company may be unable to pay its obligations.

Accepted Answer

A) True 
 B)False

Which one of the following would be considered a long-term solvency ratio?

If Year 1 equals $700, Year 2 equals $840, and Year 3 equals $630, the percentage to be assigned for Year 1 in a trend analysis, assuming that Year 1 is the base year, is

Chodron Corporation had net credit sales of $13,000,000 and cost of goods sold of $9,250,000 for the year. The average inventory for the year amounted to $1,250,000. The inventory turnover for the year is

The ______________ ratio measures the percentage of earnings distributed in the form of cash dividends.

Which of the following would not be considered an example of a discontinued operation?

Match the ratios with their formulas by entering the appropriate letter in the space provided. - Current assets/Current liabilities

Alternative accounting methods affect the quality of earnings.

Rama Company reported the following on its income statement: Income before income taxes \ 500,000 Income tax expense 150,000 Net income \ 350,000 An analysis of the income statement revealed that interest expense was $80,000. Rama Company's times interest earned was

Horizontal analysis (trend analysis) percentages for Omega Company's sales, cost of goods sold, and expenses are listed here. Instructions Explain whether Omega's net income increased, decreased, or remained unchanged over the 3-year period.

Discontinued operations refers to the disposal of a __________________ of a business.

Here is financial information for Valdez Express Inc. Instructions Prepare a schedule showing a horizontal analysis for 2017 using 2016 as the base year.

Vertical analysis (common-size) percentages for Austin Company's sales, cost of goods sold, and expenses are listed here. Did Austin Company's net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period? Provide numerical support for your answer.

Which one of the following would not be considered a liquidity ratio?

Under IFRS, the components of other comprehensive income can be reported in each of the following ways except

In a common size income statement, each item is expressed as a percentage of net income.

A liquidity ratio measures the

In a common size balance sheet, the 100 percent figure is

Match the ratios with their formulas by entering the appropriate letter in the space provided. - Income before income taxes and interest expense/Interest expense

From a creditor's point of view, the higher the debt to assets ratio, the lower the risk that the company may be unable to pay its obligations.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Exam 13: Financial Statement Analysis

Which one of the following would be considered a long-term solvency ratio?

If Year 1 equals $700, Year 2 equals $840, and Year 3 equals $630, the percentage to be assigned for Year 1 in a trend analysis, assuming that Year 1 is the base year, is

Chodron Corporation had net credit sales of $13,000,000 and cost of goods sold of $9,250,000 for the year. The average inventory for the year amounted to $1,250,000. The inventory turnover for the year is

The ______________ ratio measures the percentage of earnings distributed in the form of cash dividends.

Which of the following would not be considered an example of a discontinued operation?

Match the ratios with their formulas by entering the appropriate letter in the space provided. - Current assets/Current liabilities

Alternative accounting methods affect the quality of earnings.

Rama Company reported the following on its income statement: Income before income taxes \ 500,000 Income tax expense 150,000 Net income \ 350,000 An analysis of the income statement revealed that interest expense was $80,000. Rama Company's times interest earned was

Horizontal analysis (trend analysis) percentages for Omega Company's sales, cost of goods sold, and expenses are listed here. Instructions Explain whether Omega's net income increased, decreased, or remained unchanged over the 3-year period.

Discontinued operations refers to the disposal of a __________________ of a business.

Here is financial information for Valdez Express Inc. Instructions Prepare a schedule showing a horizontal analysis for 2017 using 2016 as the base year.

Vertical analysis (common-size) percentages for Austin Company's sales, cost of goods sold, and expenses are listed here. Did Austin Company's net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period? Provide numerical support for your answer.

Which one of the following would not be considered a liquidity ratio?

Under IFRS, the components of other comprehensive income can be reported in each of the following ways except

In a common size income statement, each item is expressed as a percentage of net income.

A liquidity ratio measures the

In a common size balance sheet, the 100 percent figure is

Match the ratios with their formulas by entering the appropriate letter in the space provided. - Income before income taxes and interest expense/Interest expense

From a creditor's point of view, the higher the debt to assets ratio, the lower the risk that the company may be unable to pay its obligations.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters