Question 1

Solvency ratios are an indication of a company's long-term viability.

Accepted Answer

A) True 
 B)False

Question 2

The following information for JG Ltd.is available to you:   Required:
1.Calculate the inventory receivable turnover ratio
2.You determined that the industry average was 3.5 and that JG Ltd.had turnovers in previous years of 2.4, 2.6, 3.4, and 3.7.Based on this information can you make any conclusions?

Accepted Answer

1.1,000,000/678,000 = 1.47 times
2.It ap

Question 3

In horizontal analysis of financial statements, the base amounts used for purposes of comparison are the financial results of a previous time period.

Accepted Answer

A) True 
 B)False

Question 4

When would a qualified audit opinion not necessarily be a concern to a company?

Accepted Answer

When a company chooses policie

Question 5

For both the accounts receivable turnover and the inventory turnover ratios, the numerator of the fraction is credit sales.

Accepted Answer

A) True 
 B)False

Question 6

Define the debt-to-equity ratio.What is its purpose?

Accepted Answer

Total long-term debt/total owners' equit

Question 7

Which division has the highest return on assets?

Accepted Answer

The Computer divisio

Question 8

Selected information from the accounting records of CDE is as follows in 000's:   What was the inventory turnover for 2014?

Accepted Answer

A) 5)00 times 
B) 4)61 times 
C) 5)45 times 
D) None of these choices are correct 
A) 5)00 times 
B) 4)61 times 
C) 5)45 times 
D) None of these choices are correct

Question 9

Where there is a deficit in total owners' equity, the ratio of total liabilities to total assets will be greater than 1 to 1; e.g., 1.2 to 1.

Accepted Answer

A) True 
 B)False

Question 10

Trend analysis is part of a(n):

Accepted Answer

A) Industrial ratio. 
B) Longitudinal comparison. 
C) Historical ratio. 
D) Cross-sectional comparison. 
A) Industrial ratio. 
B) Longitudinal comparison. 
C) Historical ratio. 
D) Cross-sectional comparison.

Question 11

In a popular business journal, JMR Ltd.was compared to KAR Corp.for the year ended December 31, 20x14.This is an example of:

Accepted Answer

A) Historical comparison. 
B) Cross-sectional comparison. 
C) Longitudinal comparison. 
D) Yearly comparison. 
E) Industrial comparison. 
A) Historical comparison. 
B) Cross-sectional comparison. 
C) Longitudinal comparison. 
D) Yearly comparison. 
E) Industrial comparison.

Question 12

As an industry analyst comparing a firm to the industry, are you likely to praise or criticize the firm in terms of Net Income/Total Asset

Accepted Answer

Net Income/Total Assets @#IMG-DLM& Altho

Question 13

A company which offers "n/15" credit terms assuming 360 days in year would be expected to have a receivable turnover of about 24 times a year.

Accepted Answer

A) True 
 B)False

Question 14

Information about the significant accounting policies of an entity is not necessary because GAAP prescribes uniform accounting treatment of all items, and it is widely understood.

Accepted Answer

A) True 
 B)False

Question 15

It is possible for companies with revenues totalling in excess of $10 million dollars to be exempt from an audit.

Accepted Answer

A) True 
 B)False

Question 16

The main place to look for clues as to management's reporting objectives is:

Accepted Answer

A) in the financial statements. 
B) in the financial statement highlights. 
C) in the management discussion and analysis section. 
D) in the notes to the financial statements. 
A) in the financial statements. 
B) in the financial statement highlights. 
C) in the management discussion and analysis section. 
D) in the notes to the financial statements.

Question 17

The "best" opinion that an auditor can give is a(n):

Accepted Answer

A) qualified opinion. 
B) unqualified opinion. 
C) adverse opinion. 
D) unqualified opinion and disclaimer of opinion are equally good. 
E) disclaimer of opinion. 
A) qualified opinion. 
B) unqualified opinion. 
C) adverse opinion. 
D) unqualified opinion and disclaimer of opinion are equally good. 
E) disclaimer of opinion.

Question 18

There still remain problems when accounting policies are disclosed for choices made among acceptable alternatives.All of the following are problems except:

Accepted Answer

A) The disclosure is specific, but the numerical information is missing. 
B) Some industries do not have to disclose accounting policies. 
C) There is no disclosure of crucial policies, such as revenue recognition. 
D) Disclosure is generally too vague to be of use without additional information. 
A) The disclosure is specific, but the numerical information is missing. 
B) Some industries do not have to disclose accounting policies. 
C) There is no disclosure of crucial policies, such as revenue recognition. 
D) Disclosure is generally too vague to be of use without additional information.

Question 19

Longitudinal comparisons compare a company's performance over time to that of its competitors while cross-sectional comparisons compare a company's own performance from one period to another.

Accepted Answer

A) True 
 B)False

Question 20

A short accounts receivable turnover ratio may mean all of the following except:

Accepted Answer

A) That the company is realizing cash from sales in a short time period. 
B) Fewer old receivables that may prove to be uncollectible. 
C) That customers are dictating the payment terms. 
D) All of these choices are correct. 
A) That the company is realizing cash from sales in a short time period. 
B) Fewer old receivables that may prove to be uncollectible. 
C) That customers are dictating the payment terms. 
D) All of these choices are correct.

Solvency ratios are an indication of a company's long-term viability.

The following information for JG Ltd.is available to you: Required: 1.Calculate the inventory receivable turnover ratio 2.You determined that the industry average was 3.5 and that JG Ltd.had turnovers in previous years of 2.4, 2.6, 3.4, and 3.7.Based on this information can you make any conclusions?

In horizontal analysis of financial statements, the base amounts used for purposes of comparison are the financial results of a previous time period.

When would a qualified audit opinion not necessarily be a concern to a company?

For both the accounts receivable turnover and the inventory turnover ratios, the numerator of the fraction is credit sales.

Define the debt-to-equity ratio.What is its purpose?

Which division has the highest return on assets?

Selected information from the accounting records of CDE is as follows in 000's: What was the inventory turnover for 2014?

Where there is a deficit in total owners' equity, the ratio of total liabilities to total assets will be greater than 1 to 1; e.g., 1.2 to 1.

Trend analysis is part of a(n):

In a popular business journal, JMR Ltd.was compared to KAR Corp.for the year ended December 31, 20x14.This is an example of:

As an industry analyst comparing a firm to the industry, are you likely to praise or criticize the firm in terms of Net Income/Total Asset

A company which offers "n/15" credit terms assuming 360 days in year would be expected to have a receivable turnover of about 24 times a year.

Information about the significant accounting policies of an entity is not necessary because GAAP prescribes uniform accounting treatment of all items, and it is widely understood.

It is possible for companies with revenues totalling in excess of $10 million dollars to be exempt from an audit.

The main place to look for clues as to management's reporting objectives is:

The "best" opinion that an auditor can give is a(n):

There still remain problems when accounting policies are disclosed for choices made among acceptable alternatives.All of the following are problems except:

Longitudinal comparisons compare a company's performance over time to that of its competitors while cross-sectional comparisons compare a company's own performance from one period to another.

A short accounts receivable turnover ratio may mean all of the following except:

Financial Liabilities and Provisions

Financial Instruments: Long-Term Debt

Shareholders Equity

Financial Instruments: Complex Debt and Equity

Corporate Income Tax

Tax Losses

Leases

Post-Employment Benefits

Earnings Per Share

Accounting Changes

Filters

Exam 22: Financial Statement Analysis

Solvency ratios are an indication of a company's long-term viability.

In horizontal analysis of financial statements, the base amounts used for purposes of comparison are the financial results of a previous time period.

When would a qualified audit opinion not necessarily be a concern to a company?

For both the accounts receivable turnover and the inventory turnover ratios, the numerator of the fraction is credit sales.

Define the debt-to-equity ratio.What is its purpose?

Which division has the highest return on assets?

Selected information from the accounting records of CDE is as follows in 000's: What was the inventory turnover for 2014?

Where there is a deficit in total owners' equity, the ratio of total liabilities to total assets will be greater than 1 to 1; e.g., 1.2 to 1.

Trend analysis is part of a(n):

In a popular business journal, JMR Ltd.was compared to KAR Corp.for the year ended December 31, 20x14.This is an example of:

As an industry analyst comparing a firm to the industry, are you likely to praise or criticize the firm in terms of Net Income/Total Asset

A company which offers "n/15" credit terms assuming 360 days in year would be expected to have a receivable turnover of about 24 times a year.

Information about the significant accounting policies of an entity is not necessary because GAAP prescribes uniform accounting treatment of all items, and it is widely understood.

It is possible for companies with revenues totalling in excess of $10 million dollars to be exempt from an audit.

The main place to look for clues as to management's reporting objectives is:

The "best" opinion that an auditor can give is a(n):

There still remain problems when accounting policies are disclosed for choices made among acceptable alternatives.All of the following are problems except:

Longitudinal comparisons compare a company's performance over time to that of its competitors while cross-sectional comparisons compare a company's own performance from one period to another.

A short accounts receivable turnover ratio may mean all of the following except:

Financial Liabilities and Provisions

Financial Instruments: Long-Term Debt

Shareholders Equity

Financial Instruments: Complex Debt and Equity

Corporate Income Tax

Tax Losses

Leases

Post-Employment Benefits

Earnings Per Share

Accounting Changes

Filters