Question 1

If a company converted a short-term note payable into a long-term note payable, this transaction would:

Accepted Answer

A) increase only working capital. 
B) decrease only working capital. 
C) have no effect on either the current ratio or net working capital. 
D) increase both working capital and the current ratio. 
E) decrease both working capital and the current ratio. 
A) increase only working capital. 
B) decrease only working capital. 
C) have no effect on either the current ratio or net working capital. 
D) increase both working capital and the current ratio. 
E) decrease both working capital and the current ratio.

Question 2

Calculate the balance sheet item Long-Term Debt

Accepted Answer

Total Debt

Question 3

Current monetary assets divided by annual operating expenditures, which is itself divided by 365, is:

Accepted Answer

A) Debt-to-total capitalization ratio. 
B) Defensive-interval ratio. 
C) Debt-to-capital employed. 
D) None of these choices are correct. 
A) Debt-to-total capitalization ratio. 
B) Defensive-interval ratio. 
C) Debt-to-capital employed. 
D) None of these choices are correct.

Question 4

STU reported the following ratios:   The financial leverage factors in 2010, 2011, and 2012 respectively, are (the parentheses indicate negative value):

Accepted Answer

A) Choice 2 
B) Choice 1 
C) Choice 5 
D) Choice 4 
E) Choice 3 
A) Choice 2 
B) Choice 1 
C) Choice 5 
D) Choice 4 
E) Choice 3

Question 5

A price-earnings ratio of 10 to 1 implies an earnings rate on market value per share of 10%.

Accepted Answer

A) True 
 B)False

Question 6

You are given the following information about KER Corp.:   Required:
Calculate KER's quick ratio.

Accepted Answer

(45,000 + 100,000)/634,000 = 0.23:1
Refe

Question 7

A review engagement provides more reliance for the users of the financial statements than an audit engagement.

Accepted Answer

A) True 
 B)False

Question 8

An adverse opinion is given if the auditor disagrees with the company on decisions made.This is generally not a serious condition as it relates only to a difference of opinion.

Accepted Answer

A) True 
 B)False

Question 9

When data used in ratio analysis are based on historical book values, the resulting ratios reflect price-level effects and real economic values.

Accepted Answer

A) True 
 B)False

Question 10

Return on total assets and return on owners' equity are used to compute financial leverage.

Accepted Answer

A) True 
 B)False

Question 11

The following data was taken from the 2014 financial statements of WXC: Income Statement
Depreciation expense (40,000)40
         Based on the above data, compute the following (round to nearest percent):

Accepted Answer

Please see

Question 12

For a company that maintains a constant dollar value of inventory on hand, a higher gross profit percentage will translate into a higher inventory turnover ratio.

Accepted Answer

A) True 
 B)False

Question 13

GAAP requires the presentation of financial statements for the current year and the two immediately preceding reporting periods.

Accepted Answer

A) True 
 B)False

Question 14

CDE reported the following 2014 data in 000s:   CDE's inventory turnover for 2014 was:

Accepted Answer

A) 6)00 times. 
B) 2)50 times. 
C) 0)33 times. 
D) 3)00 times. 
E) None of these choices are correct. 
A) 6)00 times. 
B) 2)50 times. 
C) 0)33 times. 
D) 3)00 times. 
E) None of these choices are correct.

Question 15

Which of the following analytical techniques uses statistical models in an attempt to predict a certain outcome?

Accepted Answer

A) Multivariate ratio analysis 
B) Longitudinal comparison 
C) Residual analysis 
D) Cross-sectional comparison 
A) Multivariate ratio analysis 
B) Longitudinal comparison 
C) Residual analysis 
D) Cross-sectional comparison

Question 16

You are given the following information about KER Corp.:   Required:
Calculate KER's current ratio.

Accepted Answer

(45,000 + 100,000 +

Question 17

One of the most important aspects of analysis of financial statements is the wording of the auditors' report.

Accepted Answer

A) True 
 B)False

Question 18

Efficiency ratios are also known as:

Accepted Answer

A) Solvency ratios. 
B) Effectiveness ratios. 
C) Turnover ratios. 
D) Profitability ratios. 
A) Solvency ratios. 
B) Effectiveness ratios. 
C) Turnover ratios. 
D) Profitability ratios.

Question 19

Overall management performance is better measured by use of the:

Accepted Answer

A) return on total assets. 
B) profit margin on sales. 
C) debt-equity ratio. 
D) current ratio. 
E) None of these choices are correct. 
A) return on total assets. 
B) profit margin on sales. 
C) debt-equity ratio. 
D) current ratio. 
E) None of these choices are correct.

Question 20

What is horizontal analysis?

Accepted Answer

Horizontal or trend analysis use a base

If a company converted a short-term note payable into a long-term note payable, this transaction would:

Calculate the balance sheet item Long-Term Debt

Current monetary assets divided by annual operating expenditures, which is itself divided by 365, is:

STU reported the following ratios: The financial leverage factors in 2010, 2011, and 2012 respectively, are (the parentheses indicate negative value):

A price-earnings ratio of 10 to 1 implies an earnings rate on market value per share of 10%.

You are given the following information about KER Corp.: Required: Calculate KER's quick ratio.

A review engagement provides more reliance for the users of the financial statements than an audit engagement.

An adverse opinion is given if the auditor disagrees with the company on decisions made.This is generally not a serious condition as it relates only to a difference of opinion.

When data used in ratio analysis are based on historical book values, the resulting ratios reflect price-level effects and real economic values.

Return on total assets and return on owners' equity are used to compute financial leverage.

The following data was taken from the 2014 financial statements of WXC: Income Statement Depreciation expense (40,000)40 Based on the above data, compute the following (round to nearest percent):

For a company that maintains a constant dollar value of inventory on hand, a higher gross profit percentage will translate into a higher inventory turnover ratio.

GAAP requires the presentation of financial statements for the current year and the two immediately preceding reporting periods.

CDE reported the following 2014 data in 000s: CDE's inventory turnover for 2014 was:

Which of the following analytical techniques uses statistical models in an attempt to predict a certain outcome?

You are given the following information about KER Corp.: Required: Calculate KER's current ratio.

One of the most important aspects of analysis of financial statements is the wording of the auditors' report.

Efficiency ratios are also known as:

Overall management performance is better measured by use of the:

What is horizontal analysis?

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

If a company converted a short-term note payable into a long-term note payable, this transaction would:

Calculate the balance sheet item Long-Term Debt

Current monetary assets divided by annual operating expenditures, which is itself divided by 365, is:

STU reported the following ratios: The financial leverage factors in 2010, 2011, and 2012 respectively, are (the parentheses indicate negative value):

A price-earnings ratio of 10 to 1 implies an earnings rate on market value per share of 10%.

You are given the following information about KER Corp.: Required: Calculate KER's quick ratio.

A review engagement provides more reliance for the users of the financial statements than an audit engagement.

An adverse opinion is given if the auditor disagrees with the company on decisions made.This is generally not a serious condition as it relates only to a difference of opinion.

When data used in ratio analysis are based on historical book values, the resulting ratios reflect price-level effects and real economic values.

Return on total assets and return on owners' equity are used to compute financial leverage.

The following data was taken from the 2014 financial statements of WXC: Income Statement Depreciation expense (40,000)40 Based on the above data, compute the following (round to nearest percent):

For a company that maintains a constant dollar value of inventory on hand, a higher gross profit percentage will translate into a higher inventory turnover ratio.

GAAP requires the presentation of financial statements for the current year and the two immediately preceding reporting periods.

CDE reported the following 2014 data in 000s: CDE's inventory turnover for 2014 was:

Which of the following analytical techniques uses statistical models in an attempt to predict a certain outcome?

You are given the following information about KER Corp.: Required: Calculate KER's current ratio.

One of the most important aspects of analysis of financial statements is the wording of the auditors' report.

Efficiency ratios are also known as:

Overall management performance is better measured by use of the:

What is horizontal analysis?

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