Question 1

The disposal of a significant component of a business is called

Accepted Answer

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

Question 2

Savory Thymes, Inc.had net credit sales of $9,000,000 and cost of goods sold of $5,250,000 for the year.The average inventory for the year amounted to $1,250,000.The average days in inventory during the year was approximately

Accepted Answer

A) 51 days. 
B) 65 days. 
C) 70 days. 
D) 87 days. 
A) 51 days. 
B) 65 days. 
C) 70 days. 
D) 87 days.

Question 3

The following amounts were taken from the financial statements of Ando Company:   The profit margin ratio for 2022 is

Accepted Answer

A) 14%. 
B) 16%. 
C) 15%. 
D) 18%. 
A) 14%. 
B) 16%. 
C) 15%. 
D) 18%.

Question 4

In horizontal analysis, each item is expressed as a percentage of the

Accepted Answer

A) net income amount. 
B) stockholders' equity amount. 
C) total assets amount. 
D) base-year amount. 
A) net income amount. 
B) stockholders' equity amount. 
C) total assets amount. 
D) base-year amount.

Question 5

Return on assets is most closely related to

Accepted Answer

A) profit margin and debt to assets ratio. 
B) profit margin and asset turnover. 
C) times interest earned and debt to stockholders' equity. 
D) profit margin and free cash flow. 
A) profit margin and debt to assets ratio. 
B) profit margin and asset turnover. 
C) times interest earned and debt to stockholders' equity. 
D) profit margin and free cash flow.

Question 6

Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

Accepted Answer

A) True 
 B)False

Question 7

A supplier to a company would be most interested in the

Accepted Answer

A) asset turnover. 
B) profit margin. 
C) current ratio. 
D) earnings per share. 
A) asset turnover. 
B) profit margin. 
C) current ratio. 
D) earnings per share.

Question 8

When a horizontal analysis is performed and a zero or negative amount is reported in the base year, then

Accepted Answer

A) no percentage change can be computed. 
B) the percent change will be negative. 
C) the accountant has made a mistake. 
D) the percentage change will be 100% of greater. 
A) no percentage change can be computed. 
B) the percent change will be negative. 
C) the accountant has made a mistake. 
D) the percentage change will be 100% of greater.

Question 9

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

Accepted Answer

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

Question 10

Accounts receivable turnover is useful in assessing the profitability of receivables.

Accepted Answer

A) True 
 B)False

Question 11

The current ratio is a

Accepted Answer

A) liquidity ratio. 
B) profitability ratio. 
C) long-term solvency ratio. 
D) cash flow ratio. 
A) liquidity ratio. 
B) profitability ratio. 
C) long-term solvency ratio. 
D) cash flow ratio.

Question 12

The following information is available for Patterson Company:   The accounts receivable turnover for 2022 is

Accepted Answer

A) 8.8 times. 
B) 4.5 times. 
C) 9.0 times. 
D) 9.3 times. 
A) 8.8 times. 
B) 4.5 times. 
C) 9.0 times. 
D) 9.3 times.

Question 13

A successful discount retail store such as WalMart would probably have

Accepted Answer

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

Question 14

Jack's by the Tracks has the following partial balance sheet:   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 15

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 16

In a common size balance sheet, the 100 percent figure is

Accepted Answer

A) total current assets. 
B) total property, plant and equipment. 
C) total liabilities. 
D) total assets. 
A) total current assets. 
B) total property, plant and equipment. 
C) total liabilities. 
D) total assets.

Question 17

Under which of the following cases may a percentage change be computed?

Accepted Answer

A) The trend of the amounts is decreasing but all amounts are positive. 
B) There is no amount in the base year. 
C) There is a negative amount in the base year and a negative amount in the subsequent year. 
D) There is a negative amount in the base year and a positive amount in the subsequent year. 
A) The trend of the amounts is decreasing but all amounts are positive. 
B) There is no amount in the base year. 
C) There is a negative amount in the base year and a negative amount in the subsequent year. 
D) There is a negative amount in the base year and a positive amount in the subsequent year.

Question 18

Beta Corporation had net income of $325,000 and paid dividends to common stockholders of $39,000 in 2022.The weighted average number of shares outstanding in 2022 was 50,000 shares.Beta Corporation's common stock is selling for $52 per share on the New York Stock Exchange.Beta Corporation's price-earnings ratio is

Accepted Answer

A) 12.5 times. 
B) 8.0 times. 
C) 6.5 times. 
D) 9.1 times. 
A) 12.5 times. 
B) 8.0 times. 
C) 6.5 times. 
D) 9.1 times.

Question 19

The current ratio is

Accepted Answer

A) calculated by dividing current liabilities by current assets. 
B) used to evaluate a company's liquidity and short-term debt paying ability. 
C) used to evaluate a company's solvency and long-term debt paying ability. 
D) calculated by subtracting current liabilities from current assets. 
A) calculated by dividing current liabilities by current assets. 
B) used to evaluate a company's liquidity and short-term debt paying ability. 
C) used to evaluate a company's solvency and long-term debt paying ability. 
D) calculated by subtracting current liabilities from current assets.

Question 20

A company that is leveraged is one that

Accepted Answer

A) has a high earnings per share. 
B) contains debt financing. 
C) contains equity financing. 
D) has a high current ratio. 
A) has a high earnings per share. 
B) contains debt financing. 
C) contains equity financing. 
D) has a high current ratio.

The disposal of a significant component of a business is called

Savory Thymes, Inc.had net credit sales of $9,000,000 and cost of goods sold of $5,250,000 for the year.The average inventory for the year amounted to $1,250,000.The average days in inventory during the year was approximately

The following amounts were taken from the financial statements of Ando Company: The profit margin ratio for 2022 is

In horizontal analysis, each item is expressed as a percentage of the

Return on assets is most closely related to

Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

A supplier to a company would be most interested in the

When a horizontal analysis is performed and a zero or negative amount is reported in the base year, then

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

Accounts receivable turnover is useful in assessing the profitability of receivables.

The current ratio is a

The following information is available for Patterson Company: The accounts receivable turnover for 2022 is

A successful discount retail store such as WalMart would probably have

Jack's by the Tracks has the following partial balance sheet: What effect will the accumulated other comprehensive income have on comprehensive income?

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?

In a common size balance sheet, the 100 percent figure is

Under which of the following cases may a percentage change be computed?

The current ratio is

A company that is leveraged is one that

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

Understanding Investments in Debt and Equity Securities

Filters

Exam 13: Financial Analysis: The Big Picture

The disposal of a significant component of a business is called

Savory Thymes, Inc.had net credit sales of $9,000,000 and cost of goods sold of $5,250,000 for the year.The average inventory for the year amounted to $1,250,000.The average days in inventory during the year was approximately

The following amounts were taken from the financial statements of Ando Company: The profit margin ratio for 2022 is

In horizontal analysis, each item is expressed as a percentage of the

Return on assets is most closely related to

Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

A supplier to a company would be most interested in the

When a horizontal analysis is performed and a zero or negative amount is reported in the base year, then

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

Accounts receivable turnover is useful in assessing the profitability of receivables.

The current ratio is a

The following information is available for Patterson Company: The accounts receivable turnover for 2022 is

A successful discount retail store such as WalMart would probably have

Jack's by the Tracks has the following partial balance sheet: What effect will the accumulated other comprehensive income have on comprehensive income?

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?

In a common size balance sheet, the 100 percent figure is

Under which of the following cases may a percentage change be computed?

The current ratio is

A company that is leveraged is one that

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

Understanding Investments in Debt and Equity Securities

Filters