Question 1

A ratio calculated in the analysis of financial statements

Accepted Answer

A) expresses a mathematical relationship between two numbers. 
B) shows the percentage increase from one year to another. 
C) restates all items on a financial statement in terms of dollars of the same purchasing power. 
D) is meaningful only if the numerator is greater than the denominator. 
A) expresses a mathematical relationship between two numbers. 
B) shows the percentage increase from one year to another. 
C) restates all items on a financial statement in terms of dollars of the same purchasing power. 
D) is meaningful only if the numerator is greater than the denominator.

Question 2

Comparative balance sheets are usually prepared for

Accepted Answer

A) one year. 
B) two years. 
C) three years. 
D) four years. 
A) one year. 
B) two years. 
C) three years. 
D) four years.

Question 3

Stockholders are most interested in evaluating

Accepted Answer

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

Question 4

Which one of the following is not a characteristic generally evaluated in analyzing financial statements?

Accepted Answer

A) Liquidity 
B) Profitability 
C) Marketability 
D) Solvency 
A) Liquidity 
B) Profitability 
C) Marketability 
D) Solvency

Question 5

The three basic tools of analysis are horizontal analysis, vertical analysis, and ratio analysis.

Accepted Answer

A) True 
 B)False

Question 6

Carter Corporation reported net sales of $250,000, $400,000, and $600,000 in the years 2015, 2016, and 2017 respectively.If 2015 is the base year, what is the trend percentage for 2017?

Accepted Answer

A) 100% 
B) 40% 
C) 140% 
D) 240% 
A) 100% 
B) 40% 
C) 140% 
D) 240%

Question 7

In the vertical analysis of the income statement, each item is generally stated as a percentage of net income.

Accepted Answer

A) True 
 B)False

Question 8

An aircraft company would most likely have

Accepted Answer

A) a high inventory turnover. 
B) low profit margin. 
C) high volume. 
D) a low inventory turnover. 
A) a high inventory turnover. 
B) low profit margin. 
C) high volume. 
D) a low inventory turnover.

Question 9

Dean Corporation reported net income $58,000, net sales $500,000, and average assets $800,000 for 2017.The 2017 profit margin was:

Accepted Answer

A) 5.8%. 
B) 11.6%. 
C) 62.5%. 
D) 160%. 
A) 5.8%. 
B) 11.6%. 
C) 62.5%. 
D) 160%.

Question 10

Net sales are $8,000,000, beginning total assets are $2,500,000, and the asset turnover is 4.0 times.What is the ending total asset balance?

Accepted Answer

A) $2,000,000 
B) $1,500,000 
C) $2,800,000 
D) $2,500,000 
A) $2,000,000 
B) $1,500,000 
C) $2,800,000 
D) $2,500,000

Question 11

The debt to assets ratio measures

Accepted Answer

A) the company's profitability. 
B) whether interest can be paid on debt in the current year. 
C) the proportion of interest paid relative to dividends paid. 
D) the percentage of the total assets provided by creditors. 
A) the company's profitability. 
B) whether interest can be paid on debt in the current year. 
C) the proportion of interest paid relative to dividends paid. 
D) the percentage of the total assets provided by creditors.

Question 12

Troy, Inc.decided on January 1 to discontinue its telescope manufacturing division.On July 1, the division's assets with a book value of $1,260,000 are sold for $840,000.Operating income from January 1 to June 30 for the division amounted to $130,000.Ignoring income taxes, what total amount should be reported on Troy's income statement for the current year under the caption, Discontinued Operations?

Accepted Answer

A) $130,000 
B) $290,000 loss 
C) $420,000 loss 
D) $550,000 
A) $130,000 
B) $290,000 loss 
C) $420,000 loss 
D) $550,000

Question 13

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

Accepted Answer

A) Current ratio 
B) Inventory turnover 
C) Acid-test ratio 
D) Return on assets 
A) Current ratio 
B) Inventory turnover 
C) Acid-test ratio 
D) Return on assets

Question 14

The discontinued operations section of the income statement refers to

Accepted Answer

A) discontinuance of a product line. 
B) the income or loss on products that have been completed and sold. 
C) obsolete equipment and discontinued inventory items. 
D) the disposal of a significant component of a business. 
A) discontinuance of a product line. 
B) the income or loss on products that have been completed and sold. 
C) obsolete equipment and discontinued inventory items. 
D) the disposal of a significant component of a business.

Question 15

In performing a vertical analysis, the base for sales returns and allowances is

Accepted Answer

A) sales. 
B) sales discounts. 
C) net sales. 
D) total revenues. 
A) sales. 
B) sales discounts. 
C) net sales. 
D) total revenues.

Question 16

A horizontal analysis performed on a statement of retained earnings would not show a percentage change in

Accepted Answer

A) dividends paid. 
B) net income. 
C) expenses. 
D) beginning retained earnings. 
A) dividends paid. 
B) net income. 
C) expenses. 
D) beginning retained earnings.

Question 17

In ratio analysis, the ratios are never expressed as a

Accepted Answer

A) rate. 
B) negative proportion. 
C) percentage. 
D) simple proportion. 
A) rate. 
B) negative proportion. 
C) percentage. 
D) simple proportion.

Question 18

The order of presentation of items that may appear on the statement of comprehensive income is

Accepted Answer

A) Other comprehensive income, Discontinued operations, Other revenues and expenses. 
B) Discontinued operations, Other comprehensive income, Other revenues and expenses. 
C) Other revenues and expenses, Discontinued operations, Other comprehensive income. 
D) Other revenues and expenses, Other comprehensive income, Discontinued operations. 
A) Other comprehensive income, Discontinued operations, Other revenues and expenses. 
B) Discontinued operations, Other comprehensive income, Other revenues and expenses. 
C) Other revenues and expenses, Discontinued operations, Other comprehensive income. 
D) Other revenues and expenses, Other comprehensive income, Discontinued operations.

Question 19

Inventory turnover measures the number of times on the average the inventory was sold during the period.

Accepted Answer

A) True 
 B)False

Question 20

Which one of the following is not a tool in financial statement analysis?

Accepted Answer

A) Horizontal analysis 
B) Circular analysis 
C) Vertical analysis 
D) Ratio analysis 
A) Horizontal analysis 
B) Circular analysis 
C) Vertical analysis 
D) Ratio analysis

A ratio calculated in the analysis of financial statements

Comparative balance sheets are usually prepared for

Stockholders are most interested in evaluating

Which one of the following is not a characteristic generally evaluated in analyzing financial statements?

The three basic tools of analysis are horizontal analysis, vertical analysis, and ratio analysis.

Carter Corporation reported net sales of $250,000, $400,000, and $600,000 in the years 2015, 2016, and 2017 respectively.If 2015 is the base year, what is the trend percentage for 2017?

In the vertical analysis of the income statement, each item is generally stated as a percentage of net income.

An aircraft company would most likely have

Dean Corporation reported net income $58,000, net sales $500,000, and average assets $800,000 for 2017.The 2017 profit margin was:

Net sales are $8,000,000, beginning total assets are $2,500,000, and the asset turnover is 4.0 times.What is the ending total asset balance?

The debt to assets ratio measures

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

The discontinued operations section of the income statement refers to

In performing a vertical analysis, the base for sales returns and allowances is

A horizontal analysis performed on a statement of retained earnings would not show a percentage change in

In ratio analysis, the ratios are never expressed as a

The order of presentation of items that may appear on the statement of comprehensive income is

Inventory turnover measures the number of times on the average the inventory was sold during the period.

Which one of the following is not a tool in financial statement analysis?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Time Value of Money

Filters

Exam 14: Managerial Accounting

A ratio calculated in the analysis of financial statements

Comparative balance sheets are usually prepared for

Stockholders are most interested in evaluating

Which one of the following is not a characteristic generally evaluated in analyzing financial statements?

The three basic tools of analysis are horizontal analysis, vertical analysis, and ratio analysis.

Carter Corporation reported net sales of $250,000, $400,000, and $600,000 in the years 2015, 2016, and 2017 respectively.If 2015 is the base year, what is the trend percentage for 2017?

In the vertical analysis of the income statement, each item is generally stated as a percentage of net income.

An aircraft company would most likely have

Dean Corporation reported net income $58,000, net sales $500,000, and average assets $800,000 for 2017.The 2017 profit margin was:

Net sales are $8,000,000, beginning total assets are $2,500,000, and the asset turnover is 4.0 times.What is the ending total asset balance?

The debt to assets ratio measures

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

The discontinued operations section of the income statement refers to

In performing a vertical analysis, the base for sales returns and allowances is

A horizontal analysis performed on a statement of retained earnings would not show a percentage change in

In ratio analysis, the ratios are never expressed as a

The order of presentation of items that may appear on the statement of comprehensive income is

Inventory turnover measures the number of times on the average the inventory was sold during the period.

Which one of the following is not a tool in financial statement analysis?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Time Value of Money

Filters