Question 1

Ratios are most useful in identifying

Accepted Answer

A)  trends. 
B)  differences. 
C)  causes. 
D)  relationships. 
A)  trends. 
B)  differences. 
C)  causes. 
D)  relationships.

Question 2

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Accepted Answer

A)  that has been arranged from the highest number to the lowest number. 
B)  that has been arranged from the lowest number to the highest number. 
C)  to determine which items are in error. 
D)  to determine the amount and/or percentage increase or decrease that has taken place. 
A)  that has been arranged from the highest number to the lowest number. 
B)  that has been arranged from the lowest number to the highest number. 
C)  to determine which items are in error. 
D)  to determine the amount and/or percentage increase or decrease that has taken place.

Question 3

Jack's by the Tracks has the following partial balance sheet: JACK'S BY THE TRACKS.
Balance Sheet (partial)
$\begin{array}{lr}\text { Stockholders' equity. }\
\text { Common stock } & \$ 6,000,000 \
\text { Retained earnings } & 2,000,000 \
\text { Total paid-in capital and retained earnings } & 8,000,000 \
\text { Accumulated other comprehensive income } & \$ 00,000 \
\text { Total stockholders' equity: } & \$ 8,800,000
\end{array}$ What effect will the accumulated other comprehensive income have on comprehensive income?

Accepted Answer

A)  No effect on comprehensive income. 
B)  Increase of $800,000 in comprehensive income. 
C)  Increase of $8,800,000 in comprehensive income. 
D)  Decrease of $800,000 in comprehensive income. 
A)  No effect on comprehensive income. 
B)  Increase of $800,000 in comprehensive income. 
C)  Increase of $8,800,000 in comprehensive income. 
D)  Decrease of $800,000 in comprehensive income.

Question 4

Other comprehensive income includes all changes in stockholder's equity during a period including those changes resulting from investments by stockholder's.

Accepted Answer

A) True 
 B)False

Question 5

All of the following statements are true regarding comprehensive income except

Accepted Answer

A)  companies are required to report comprehensive income. 
B)  a company would add an unrealized loss on available-for-sale securities to net income to calculate comprehensive income. 
C)  comprehensive income does not include changes resulting from investments by stockholders. 
D)  comprehensive income does not include dividends to stockholders. 
A)  companies are required to report comprehensive income. 
B)  a company would add an unrealized loss on available-for-sale securities to net income to calculate comprehensive income. 
C)  comprehensive income does not include changes resulting from investments by stockholders. 
D)  comprehensive income does not include dividends to stockholders.

Question 6

Net sales are $2,700,000, beginning total assets are $700,000, and the asset turnover is 3.0. What is the ending total asset balance?

Accepted Answer

A)  $900,000 
B)  $1,100,000 
C)  $700,000 
D)  $800,000 
A)  $900,000 
B)  $1,100,000 
C)  $700,000 
D)  $800,000

Question 7

If equal amounts are added to the numerator and the denominator of the current ratio and the ratio is over one, the ratio will always

Accepted Answer

A)  increase. 
B)  decrease. 
C)  stay the same. 
D)  equal zero. 
A)  increase. 
B)  decrease. 
C)  stay the same. 
D)  equal zero.

Question 8

Long-term creditors are usually most interested in evaluating

Accepted Answer

A)  liquidity. 
B)  marketability. 
C)  profitability. 
D)  solvency. 
A)  liquidity. 
B)  marketability. 
C)  profitability. 
D)  solvency.

Question 9

In analyzing financial statements, horizontal analysis is a

Accepted Answer

A)  requirement. 
B)  tool. 
C)  principle. 
D)  theory. 
A)  requirement. 
B)  tool. 
C)  principle. 
D)  theory.

Question 10

A primary purpose of vertical analysis is to observe trends over a three-year period.

Accepted Answer

A) True 
 B)False

Question 11

A company with $60,000 in current assets and $35,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

Accepted Answer

A)  both decrease. 
B)  both increase. 
C)  increase and remain the same, respectively. 
D)  remain the same and decrease, respectively. 
A)  both decrease. 
B)  both increase. 
C)  increase and remain the same, respectively. 
D)  remain the same and decrease, respectively.

Ratios are most useful in identifying

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Other comprehensive income includes all changes in stockholder's equity during a period including those changes resulting from investments by stockholder's.

All of the following statements are true regarding comprehensive income except

Net sales are $2,700,000, beginning total assets are $700,000, and the asset turnover is 3.0. What is the ending total asset balance?

If equal amounts are added to the numerator and the denominator of the current ratio and the ratio is over one, the ratio will always

Long-term creditors are usually most interested in evaluating

In analyzing financial statements, horizontal analysis is a

A primary purpose of vertical analysis is to observe trends over a three-year period.

A company with $60,000 in current assets and $35,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

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

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Exam 13: Financial Statement Analysis

Ratios are most useful in identifying

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Other comprehensive income includes all changes in stockholder's equity during a period including those changes resulting from investments by stockholder's.

All of the following statements are true regarding comprehensive income except

Net sales are $2,700,000, beginning total assets are $700,000, and the asset turnover is 3.0. What is the ending total asset balance?

If equal amounts are added to the numerator and the denominator of the current ratio and the ratio is over one, the ratio will always

Long-term creditors are usually most interested in evaluating

In analyzing financial statements, horizontal analysis is a

A primary purpose of vertical analysis is to observe trends over a three-year period.

A company with $60,000 in current assets and $35,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

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