Question 1

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 2

The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.   What is the inventory turnover for Ortiz?

Accepted Answer

A) 3,2 times 
B) 5.5 times 
C) 11 times 
D) 0.18 times 
A) 3,2 times 
B) 5.5 times 
C) 11 times 
D) 0.18 times

Question 3

Ale Corporation had net income of $240,000 and paid dividends to common stockholders of $40,000 in 2014. The weighted average number of shares outstanding in 2014 was 60,000 shares. Ale Corporation's common stock is selling for $76 per share on the New York Stock Exchange. Ale Corporation's price-earnings ratio is

Accepted Answer

A) 3.2 times. 
B) 22.8 times. 
C) 19 times. 
D) 12.7 times. 
A) 3.2 times. 
B) 22.8 times. 
C) 19 times. 
D) 12.7 times.

Question 4

Assume the following cost of goods sold data for a company:   If 2014 is the base year, what is the percentage increase in cost of goods sold from 2014 to 2016?

Accepted Answer

A) 70.4% 
B) 42% 
C) 85.7% 
D) 117% 
A) 70.4% 
B) 42% 
C) 85.7% 
D) 117%

Question 5

Each of the following is an extraordinary item except the

Accepted Answer

A) effects of major casualties, if rare in the area. 
B) effects of a newly enacted law or regulation. 
C) expropriation of property by a foreign government. 
D) losses attributable to labor strikes. 
A) effects of major casualties, if rare in the area. 
B) effects of a newly enacted law or regulation. 
C) expropriation of property by a foreign government. 
D) losses attributable to labor strikes.

Question 6

In performing a vertical analysis, the base for cost of goods sold is

Accepted Answer

A) total selling expenses. 
B) net sales. 
C) total revenues. 
D) total expenses. 
A) total selling expenses. 
B) net sales. 
C) total revenues. 
D) total expenses.

Question 7

Blitzen Corporation had net income of $200,000 and paid dividends to common stockholders of $50,000 in 2014. The weighted average number of shares outstanding in 2014 was 40,000 shares. Blitzen Corporation's common stock is selling for $35 per share on the New York Stock Exchange. Blitzen Corporation's price-earnings ratio is

Accepted Answer

A) 5.6 times. 
B) 7 times. 
C) 5 times. 
D) 9.3 times. 
A) 5.6 times. 
B) 7 times. 
C) 5 times. 
D) 9.3 times.

Question 8

A company has a accounts receivable turnover of 10 times. The average accounts receivable during the period are $400,000. What is the amount of net credit sales for the period?

Accepted Answer

A) $40,000 
B) $4,000,000 
C) $400,000 
D) Cannot be determined from the information given 
A) $40,000 
B) $4,000,000 
C) $400,000 
D) Cannot be determined from the information given

Question 9

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 10

Intracompany comparisons of the same financial statement items can often detect changes in financial relationships and significant trends.

Accepted Answer

A) True 
 B)False

Question 11

The disposal of a significant component of a business is called

Accepted Answer

A) a change in accounting principle. 
B) an extraordinary item. 
C) an other expense. 
D) discontinued operations. 
A) a change in accounting principle. 
B) an extraordinary item. 
C) an other expense. 
D) discontinued operations.

Question 12

Long-term creditors are usually most interested in evaluating

Accepted Answer

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

Question 13

The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.   What is the profit margin for Ortiz?

Accepted Answer

A) 113% 
B) 28.2% 
C) 69% 
D) 78% 
A) 113% 
B) 28.2% 
C) 69% 
D) 78%

Question 14

Each of the following is a liquidity ratio except the

Accepted Answer

A) acid-test ratio. 
B) current ratio. 
C) debt to assets ratio. 
D) inventory turnover. 
A) acid-test ratio. 
B) current ratio. 
C) debt to assets ratio. 
D) inventory turnover.

Question 15

Which one of the following would be classified as an extraordinary item?

Accepted Answer

A) Expropriation of property by a foreign government 
B) Losses attributed to a labor strike 
C) Write-down of inventories 
D) Gains or losses from sales of equipment 
A) Expropriation of property by a foreign government 
B) Losses attributed to a labor strike 
C) Write-down of inventories 
D) Gains or losses from sales of equipment

Question 16

Country Company reported the following on its income statement:   An analysis of the income statement revealed that interest expense was $100,000. Country Company's times interest earned was

Accepted Answer

A) 3.4 times. 
B) 9.5 times. 
C) 6.5 times. 
D) 8.5 times. 
A) 3.4 times. 
B) 9.5 times. 
C) 6.5 times. 
D) 8.5 times.

Question 17

Beta's Bunny Barn has experienced a $80,000 loss due to tornado damage to its inventory. Tornados have never before occurred in this area. Assuming that the company's tax rate is 30%, what amount will be reported for this loss on the income statement?

Accepted Answer

A) $80,000 
B) $56,000 
C) $24,000 
D) $72,000 
A) $80,000 
B) $56,000 
C) $24,000 
D) $72,000

Question 18

The following financial statement information is available for Long Corporation:   The times interest earned for 2015 is

Accepted Answer

A) 7.4 times. 
B) 6.4 times. 
C) 9.1 times. 
D) 7.8 times. 
A) 7.4 times. 
B) 6.4 times. 
C) 9.1 times. 
D) 7.8 times.

Question 19

The following information pertains to Rural Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.   What is the profit margin for Rural?

Accepted Answer

A) 27.8% 
B) 70.6% 
C) 65.4% 
D) 46.2% 
A) 27.8% 
B) 70.6% 
C) 65.4% 
D) 46.2%

Question 20

Proctor Corporation had beginning inventory $100,000, cost of goods sold $750,000, and ending inventory $150,000. What was Proctor's inventory turnover?

Accepted Answer

A) 3 times. 
B) 6 times. 
C) 7.5 times. 
D) 5 times. 
A) 3 times. 
B) 6 times. 
C) 7.5 times. 
D) 5 times.

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

The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the inventory turnover for Ortiz?

Assume the following cost of goods sold data for a company: If 2014 is the base year, what is the percentage increase in cost of goods sold from 2014 to 2016?

Each of the following is an extraordinary item except the

In performing a vertical analysis, the base for cost of goods sold is

A company has a accounts receivable turnover of 10 times. The average accounts receivable during the period are $400,000. What is the amount of net credit sales for the period?

The discontinued operations section of the income statement refers to

Intracompany comparisons of the same financial statement items can often detect changes in financial relationships and significant trends.

The disposal of a significant component of a business is called

Long-term creditors are usually most interested in evaluating

The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the profit margin for Ortiz?

Each of the following is a liquidity ratio except the

Which one of the following would be classified as an extraordinary item?

Country Company reported the following on its income statement: An analysis of the income statement revealed that interest expense was $100,000. Country Company's times interest earned was

Beta's Bunny Barn has experienced a $80,000 loss due to tornado damage to its inventory. Tornados have never before occurred in this area. Assuming that the company's tax rate is 30%, what amount will be reported for this loss on the income statement?

The following financial statement information is available for Long Corporation: The times interest earned for 2015 is

The following information pertains to Rural Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the profit margin for Rural?

Proctor Corporation had beginning inventory $100,000, cost of goods sold $750,000, and ending inventory $150,000. What was Proctor's inventory turnover?

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Filters

Exam 14: Financial Statement Analysis

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

The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the inventory turnover for Ortiz?

Assume the following cost of goods sold data for a company: If 2014 is the base year, what is the percentage increase in cost of goods sold from 2014 to 2016?

Each of the following is an extraordinary item except the

In performing a vertical analysis, the base for cost of goods sold is

A company has a accounts receivable turnover of 10 times. The average accounts receivable during the period are $400,000. What is the amount of net credit sales for the period?

The discontinued operations section of the income statement refers to

Intracompany comparisons of the same financial statement items can often detect changes in financial relationships and significant trends.

The disposal of a significant component of a business is called

Long-term creditors are usually most interested in evaluating

The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the profit margin for Ortiz?

Each of the following is a liquidity ratio except the

Which one of the following would be classified as an extraordinary item?

Country Company reported the following on its income statement: An analysis of the income statement revealed that interest expense was $100,000. Country Company's times interest earned was

Beta's Bunny Barn has experienced a $80,000 loss due to tornado damage to its inventory. Tornados have never before occurred in this area. Assuming that the company's tax rate is 30%, what amount will be reported for this loss on the income statement?

The following financial statement information is available for Long Corporation: The times interest earned for 2015 is

The following information pertains to Rural Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the profit margin for Rural?

Proctor Corporation had beginning inventory $100,000, cost of goods sold $750,000, and ending inventory $150,000. What was Proctor's inventory turnover?

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Filters