Question 1

What was the percentage of decrease in the Accounts Receivable account if the receivables were $80,000 in Year 1,and $60,000 in Year 2?

Accepted Answer

A) (25%) 
B) 33.33% 
C) (33.33%) 
D) 25% 
A) (25%) 
B) 33.33% 
C) (33.33%) 
D) 25%

Question 2

Which analysis deals with comparing items in a financial report by expressing each item as a percentage of a certain base total?

Accepted Answer

A) Vertical analysis 
B) Ratio analysis 
C) Trend analysis 
D) Common-size statement 
A) Vertical analysis 
B) Ratio analysis 
C) Trend analysis 
D) Common-size statement

Question 3

The ratio that indicates how much profit is generated from each sales dollar to cover general and selling expenses is:

Accepted Answer

A) gross profit rate. 
B) return on sales. 
C) rate of return on total assets. 
D) rate of return on common stockholders' equity. 
A) gross profit rate. 
B) return on sales. 
C) rate of return on total assets. 
D) rate of return on common stockholders' equity.

Question 4

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1) liquidity, (column 2) asset management, (column 3) debt, or (column 4) profitability.
-$$\begin{array} { | l | c | c | c | c | } 
\hline & & \text { Asset } & & \
& \text { Liquidity } & \text { Management } & \text { Debt } & \text { Profitability } \
\hline \text { Return on sales } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following items, indicate...

Question 5

What is the rate of return on common stockholders' equity if net income before taxes is $21,200,sales are $200,000,and common stockholders' equity is $76,000?

Accepted Answer

A) 22.7% 
B) 26.4% 
C) 27.9% 
D) None of these answers is correct. 
A) 22.7% 
B) 26.4% 
C) 27.9% 
D) None of these answers is correct.

Question 6

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1) liquidity, (column 2) asset management, (column 3) debt, or (column 4) profitability
-$$\begin{array} { | l | c | c | c | c | } 
\hline & & \text { Asset } & & \
& \text { Liquidity } & \text { Management } & \text { Debt } & \text { Profitability } \
\hline \text { Times interest earned } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following items, indicate...

Question 7

From the following information of Carlson's Restoration Corporation,compute:
a.________ Asset turnover for Year 2.
b.________ Inventory turnover for Year 2.
c.________ Accounts receivable turnover for Year 2.
 $$\begin{array} { l r r } 
 & \underline { \text { Year } 2 } & \underline { \text { Year } 1 } \
\text { Net Sales (on credit) }& \$ 150,000 & \$ 120,000 \
\text { Cost of Goods Sold } & 90,000 & 84,000 \
\text { Net Income } & 30,000 & 24,000 \
\text { Ending Acct. Receivable } & 24,000 & 21,000 \
\text { Ending Inventory }  & 16,500 & 13,500 \
\text { Total Assets }& 120,000 & 135,000
\end{array}$$

Accepted Answer

a.1.25 tim

Question 8

If the return on common stockholders' equity is more than the industry standard,it means the company is using debt financing successfully.

Accepted Answer

A) True 
 B)False

Question 9

A current ratio of 1.5 times would mean that the business has 1.5 times more assets than liabilities.

Accepted Answer

A) True 
 B)False

Question 10

Compute the gross profit rate when net sales are $350,000 and gross profits are $189,000.

Accepted Answer

A) 51:10 
B) 54% 
C) 51% 
D) 54:10 
A) 51:10 
B) 54% 
C) 51% 
D) 54:10

Question 11

A company has $50,000 in cash,$15,000 in accounts receivable,$25,000 in temporary investments and $125,000 in merchandise inventory.The company has $50,000 in current liabilities.The company's acid test (quick)ratio is:

Accepted Answer

A) 1)30. 
B) 0)526. 
C) 4)30. 
D) 1)80. 
A) 1)30. 
B) 0)526. 
C) 4)30. 
D) 1)80.

Question 12

A type of analysis that compares each item with the same item in other periods is called horizontal analysis.

Accepted Answer

A) True 
 B)False

Question 13

A low debt to total assets ratio reduces a creditor's risk if liquidation occurs.

Accepted Answer

A) True 
 B)False

Question 14

The ratios that measure a company's ability to earn profits are known as.

Accepted Answer

A) Liquidity Ratios. 
B) Debt Management Ratios. 
C) Profitability Ratios. 
D) None of the above 
A) Liquidity Ratios. 
B) Debt Management Ratios. 
C) Profitability Ratios. 
D) None of the above

Question 15

If management wishes to know how long it takes to collect from a charge customer,they could use the:

Accepted Answer

A) rate of return on total assets. 
B) average collection period. 
C) acid test ratio. 
D) current ratio. 
A) rate of return on total assets. 
B) average collection period. 
C) acid test ratio. 
D) current ratio.

Question 16

Chuck Company has a beginning Accounts Receivable balance of $85,000 and an ending balance of $50,000.Net credit sales are $300,000.The company's accounts receivable turnover ratio is:

Accepted Answer

A) 4)444. 
B) 4)167. 
C) 4)000. 
D) None of the above 
A) 4)444. 
B) 4)167. 
C) 4)000. 
D) None of the above

Question 17

Selected data for Stick's Design are given as of December 31,Year 1 and Year 2:
   
Required: Compute the following:
a.________ Current ratio for Year 2.
b.________ Acid-test ratio for Year 2.
c.________ Accounts receivable turnover for Year 2.
d.________ Average collection period for Year 2.
e.________ Inventory turnover for Year 2.

Accepted Answer

a.1.67:1
b.1.33:1
c.

Question 18

Accounts receivable on January 1 was $30,000 and,at the end of the year it was $50,000.Net credit sales were $160,000.Accounts receivable turnover is:

Accepted Answer

A) 2 times. 
B) 4 times. 
C) 5 times. 
D) 6)67 times. 
A) 2 times. 
B) 4 times. 
C) 5 times. 
D) 6)67 times.

Question 19

With a beginning Accounts Receivable balance of $40,000,an ending balance of $100,000,and net credit sales of $600,000,compute accounts receivable turnover ratio (rounded to the nearest tenth).

Accepted Answer

A) 7)6 
B) 11.4 
C) 8)57 
D) 3)8 
A) 7)6 
B) 11.4 
C) 8)57 
D) 3)8

Question 20

The current ratio for a company with current assets of $120,000,current liabilities of $50,000,total assets of $150,000,and net sales of $80,000,would be:

Accepted Answer

A) 3)0. 
B) 0)416. 
C) 2)4. 
D) 0)333. 
A) 3)0. 
B) 0)416. 
C) 2)4. 
D) 0)333.

Exam 22: Analyzing Financial Statements

What was the percentage of decrease in the Accounts Receivable account if the receivables were $80,000 in Year 1,and $60,000 in Year 2?

Which analysis deals with comparing items in a financial report by expressing each item as a percentage of a certain base total?

The ratio that indicates how much profit is generated from each sales dollar to cover general and selling expenses is:

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1) liquidity, (column 2) asset management, (column 3) debt, or (column 4) profitability. - Asset Liquidity Management Debt Profitability Return on sales

What is the rate of return on common stockholders' equity if net income before taxes is $21,200,sales are $200,000,and common stockholders' equity is $76,000?

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1) liquidity, (column 2) asset management, (column 3) debt, or (column 4) profitability - Asset Liquidity Management Debt Profitability Times interest earned

If the return on common stockholders' equity is more than the industry standard,it means the company is using debt financing successfully.

A current ratio of 1.5 times would mean that the business has 1.5 times more assets than liabilities.

Compute the gross profit rate when net sales are $350,000 and gross profits are $189,000.

A company has $50,000 in cash,$15,000 in accounts receivable,$25,000 in temporary investments and $125,000 in merchandise inventory.The company has $50,000 in current liabilities.The company's acid test (quick)ratio is:

A type of analysis that compares each item with the same item in other periods is called horizontal analysis.

A low debt to total assets ratio reduces a creditor's risk if liquidation occurs.

The ratios that measure a company's ability to earn profits are known as.

If management wishes to know how long it takes to collect from a charge customer,they could use the:

Chuck Company has a beginning Accounts Receivable balance of $85,000 and an ending balance of $50,000.Net credit sales are $300,000.The company's accounts receivable turnover ratio is:

Accounts receivable on January 1 was $30,000 and,at the end of the year it was $50,000.Net credit sales were $160,000.Accounts receivable turnover is:

With a beginning Accounts Receivable balance of $40,000,an ending balance of $100,000,and net credit sales of $600,000,compute accounts receivable turnover ratio (rounded to the nearest tenth).

The current ratio for a company with current assets of $120,000,current liabilities of $50,000,total assets of $150,000,and net sales of $80,000,would be:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters