Question 1

Bill's Pizza has an asset turnover of 3.5. The total assets of Bill's were $95,000. The net sales of Bill's Pizza is:

Accepted Answer

A)  $27,142.85 
B)  $332,500.00 
C)  $271,428.50 
D)  $33,250.00 
E)  None of these 
A)  $27,142.85 
B)  $332,500.00 
C)  $271,428.50 
D)  $33,250.00 
E)  None of these

Question 2

Trend analysis expresses each number as a percent of the base year.

Accepted Answer

A) True 
 B)False

Question 3

Lee Company has a current ratio of 2.65. The acid test ratio is 2.01. The current liabilities of Lee are $45,000. The dollar amount of merchandise inventory is (assume no prepaid expenses):

Accepted Answer

A)  $28,008 
B)  $28,800 
C)  $90,450 
D)  $90,540 
E)  None of these 
A)  $28,008 
B)  $28,800 
C)  $90,450 
D)  $90,540 
E)  None of these

Question 4

Debt management ratios show a company how well its assets are managed.

Accepted Answer

A) True 
 B)False

Question 5

From the following, prepare a balance sheet for Roe Co. as of December 31, 2015.

Accepted Answer

The answer of From the following, prepare a balance sheet...

Question 6

Income statements are prepared only once a year.

Accepted Answer

A) True 
 B)False

Question 7

The asset turnover is gross sales divided by total assets.

Accepted Answer

A) True 
 B)False

Question 8

Retained earnings is the same as cash.

Accepted Answer

A) True 
 B)False

Question 9

Vertical analysis need not be done only on comparative reports since calculations were within each period of time.

Accepted Answer

A) True 
 B)False

Question 10

The asset turnover from the following is (round to nearest tenth):

Accepted Answer

A)  1.7 
B)  1.5 
C)  1.9 
D)  1.6 
E)  None of these 
A)  1.7 
B)  1.5 
C)  1.9 
D)  1.6 
E)  None of these

Question 11

The acid test ratio does not include:

Accepted Answer

A)  Cash 
B)  Accounts receivable 
C)  Supplies 
D)  Inventory 
E)  None of these 
A)  Cash 
B)  Accounts receivable 
C)  Supplies 
D)  Inventory 
E)  None of these

Question 12

Horizontal analysis can analyze balance sheets for two or more periods.

Accepted Answer

A) True 
 B)False

Question 13

Cash is a liability.

Accepted Answer

A) True 
 B)False

Question 14

Cost of merchandise sold is equal to beginning inventory minus net purchases minus ending inventory.

Accepted Answer

A) True 
 B)False

Question 15

A comparative statement contains data for less than two successive accounting periods.

Accepted Answer

A) True 
 B)False

Question 16

Net income is equal to gross profit minus operating expenses.

Accepted Answer

A) True 
 B)False

Question 17

The total debt to total assets of Logan Company was .71. The total of Logan's assets was $270,000. The amount of total debt is:

Accepted Answer

A)  $146,700 
B)  $191,700 
C)  $119,700 
D)  $461,700 
E)  None of these 
A)  $146,700 
B)  $191,700 
C)  $119,700 
D)  $461,700 
E)  None of these

Question 18

Assets, liabilities, capital, and revenues are listed on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

Cash is recorded on the income statement.

Accepted Answer

A) True 
 B)False

Question 20

As the accountant of Roe Hairdresser, you have been asked to prepare an income statement from the following data for the month ended June 2014:

Accepted Answer

The answer of As the accountant of Roe Hairdresser, you...

Exam 13: How to Read, Analyze, and Interpret Financial Reports

Bill's Pizza has an asset turnover of 3.5. The total assets of Bill's were $95,000. The net sales of Bill's Pizza is:

Trend analysis expresses each number as a percent of the base year.

Lee Company has a current ratio of 2.65. The acid test ratio is 2.01. The current liabilities of Lee are $45,000. The dollar amount of merchandise inventory is (assume no prepaid expenses):

Debt management ratios show a company how well its assets are managed.

From the following, prepare a balance sheet for Roe Co. as of December 31, 2015.

Income statements are prepared only once a year.

The asset turnover is gross sales divided by total assets.

Retained earnings is the same as cash.

Vertical analysis need not be done only on comparative reports since calculations were within each period of time.

The asset turnover from the following is (round to nearest tenth):

The acid test ratio does not include:

Horizontal analysis can analyze balance sheets for two or more periods.

Cash is a liability.

Cost of merchandise sold is equal to beginning inventory minus net purchases minus ending inventory.

A comparative statement contains data for less than two successive accounting periods.

Net income is equal to gross profit minus operating expenses.

The total debt to total assets of Logan Company was .71. The total of Logan's assets was $270,000. The amount of total debt is:

Assets, liabilities, capital, and revenues are listed on the balance sheet.

Cash is recorded on the income statement.

As the accountant of Roe Hairdresser, you have been asked to prepare an income statement from the following data for the month ended June 2014:

Problem Solving With Math

Fractions

Decimals

Solving for the Unknown

Business Statistics

Banking and Budgeting

Payroll and Income Tax

Sales, Excise, and Property Taxes

Risk Management

Installment Buying and Revolving Charge Credit Cards

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Depreciation

Inventory and Overhead

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

The Cost of Home Ownership

Compound Interest and Present Value

Annuities and Sinking Funds

Stocks, Bonds, and Mutual Funds

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