Question 1

Disclosure of significant accounting policies should include all of the following items except:

Accepted Answer

A) the depreciation methods. 
B) the inventory costing methods. 
C) the amortization methods. 
D) the valuation method used for operational assets. 
A) the depreciation methods. 
B) the inventory costing methods. 
C) the amortization methods. 
D) the valuation method used for operational assets.

Question 2

The quick ratio will always be less than or equal to the current ratio.

Accepted Answer

A) True 
 B)False

Question 3

All of the following are examples of lending decisions except:

Accepted Answer

A) accepting employment. 
B) buy corporate bonds on the open market. 
C) finance the takeover of another corporation. 
D) extend normal credit terms. 
A) accepting employment. 
B) buy corporate bonds on the open market. 
C) finance the takeover of another corporation. 
D) extend normal credit terms.

Question 4

What is vertical analysis?

Accepted Answer

Vertical analysis or common size analysi

Question 5

If the five million dollar investment in the Cable TV division is sold and redeployed in the computer subsidiary at the same rate of return on assets currently achieved in the computer division, What will be the new return on assets for the entire corporation?

Accepted Answer

Return on redeployed assets in

Question 6

What are some advantages to using ratio analysis? What are some of its limitations?

Accepted Answer

Advantages
Ratios allow the user compare

Question 7

A company issuing financial statements would most prefer to receive an auditor's opinion that is:

Accepted Answer

A) qualified. 
B) adverse. 
C) a disclaimer. 
D) either qualified or unqualified. 
E) unqualified. 
A) qualified. 
B) adverse. 
C) a disclaimer. 
D) either qualified or unqualified. 
E) unqualified.

Question 8

The statement of significant accounting policies, which is included in the notes to the financial statements, must include reasons for the selection of one generally accepted accounting method over another generally accepted accounting method.

Accepted Answer

A) True 
 B)False

Question 9

Generally, an acid-test ratio of 2 to 1 is preferable to a working capital ratio of 2 to 1.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following analytical techniques would best be used to compare a company's performance to that of its competitors over time?

Accepted Answer

A) Cross-sectional comparison 
B) Statistical multivariate ratio analysis 
C) Residual analysis 
D) Time-series analysis 
A) Cross-sectional comparison 
B) Statistical multivariate ratio analysis 
C) Residual analysis 
D) Time-series analysis

Question 11

Vertical analysis of financial statements refers to the development of percentages indicating the proportionate changes in selected financial statements for two or more reporting periods.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not known as a solvency ratio?

Accepted Answer

A) Defensive-interval ratio 
B) Debt-to-total assets 
C) Debt-to-equity 
D) Times interest earned 
A) Defensive-interval ratio 
B) Debt-to-total assets 
C) Debt-to-equity 
D) Times interest earned

Question 13

JMR Company has a current ratio of 1.3:1.What does this tell you about the Company? What other information would you like to know?

Accepted Answer

Although a general rule of thumb for the

Question 14

Return on investment (of a corporation)is affected by the market price of its shares.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following transactions would increase a company's positive current ratio?

Accepted Answer

A) Borrow money on a short-term note 
B) Use the equity method to reflect earnings of an investee 
C) Repay the principal on a short-term note 
D) Sell a temporary investment at a loss 
E) None of these choices would increase a company's positive current ratio 
A) Borrow money on a short-term note 
B) Use the equity method to reflect earnings of an investee 
C) Repay the principal on a short-term note 
D) Sell a temporary investment at a loss 
E) None of these choices would increase a company's positive current ratio

Question 16

A company decides to pay off some of its current liabilities with cash.Before doing so the company had a current ratio of 1.After paying these liabilities, the company's current ratio will improve.

Accepted Answer

A) True 
 B)False

Question 17

The allocation to the respective common and preferred equities in calculation of the book value per common share will depend upon the preferential rights of preferred shares.Liquidation, cumulative and participating preferences of the preferred shares must be satisfied; the balance of owners' equity then becomes the common share equity.

Accepted Answer

A) True 
 B)False

Question 18

A financial statement analyst will look at the cash flow statement for all of the following except:

Accepted Answer

A) If cash flow is significantly larger than earnings, the company may be very conservative in its accounting practices. 
B) To determine the depreciation add back. 
C) If earnings with amortization added back are significantly larger than cash flow from operations, the company may be maximizing net income. 
D) To see if the cash flow statement excludes certain operating expenditures. 
A) If cash flow is significantly larger than earnings, the company may be very conservative in its accounting practices. 
B) To determine the depreciation add back. 
C) If earnings with amortization added back are significantly larger than cash flow from operations, the company may be maximizing net income. 
D) To see if the cash flow statement excludes certain operating expenditures.

Question 19

The negotiating of a collective agreement is a contractual decision that may necessitate the use of financial analysis.

Accepted Answer

A) True 
 B)False

Question 20

Compute the return on assets for the entire corporation.

Accepted Answer

Please see the follo

Disclosure of significant accounting policies should include all of the following items except:

The quick ratio will always be less than or equal to the current ratio.

All of the following are examples of lending decisions except:

What is vertical analysis?

If the five million dollar investment in the Cable TV division is sold and redeployed in the computer subsidiary at the same rate of return on assets currently achieved in the computer division, What will be the new return on assets for the entire corporation?

What are some advantages to using ratio analysis? What are some of its limitations?

A company issuing financial statements would most prefer to receive an auditor's opinion that is:

The statement of significant accounting policies, which is included in the notes to the financial statements, must include reasons for the selection of one generally accepted accounting method over another generally accepted accounting method.

Generally, an acid-test ratio of 2 to 1 is preferable to a working capital ratio of 2 to 1.

Which of the following analytical techniques would best be used to compare a company's performance to that of its competitors over time?

Vertical analysis of financial statements refers to the development of percentages indicating the proportionate changes in selected financial statements for two or more reporting periods.

Which of the following is not known as a solvency ratio?

JMR Company has a current ratio of 1.3:1.What does this tell you about the Company? What other information would you like to know?

Return on investment (of a corporation)is affected by the market price of its shares.

Which of the following transactions would increase a company's positive current ratio?

A company decides to pay off some of its current liabilities with cash.Before doing so the company had a current ratio of 1.After paying these liabilities, the company's current ratio will improve.

A financial statement analyst will look at the cash flow statement for all of the following except:

The negotiating of a collective agreement is a contractual decision that may necessitate the use of financial analysis.

Compute the return on assets for the entire corporation.

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

Disclosure of significant accounting policies should include all of the following items except:

The quick ratio will always be less than or equal to the current ratio.

All of the following are examples of lending decisions except:

What is vertical analysis?

If the five million dollar investment in the Cable TV division is sold and redeployed in the computer subsidiary at the same rate of return on assets currently achieved in the computer division, What will be the new return on assets for the entire corporation?

What are some advantages to using ratio analysis? What are some of its limitations?

A company issuing financial statements would most prefer to receive an auditor's opinion that is:

The statement of significant accounting policies, which is included in the notes to the financial statements, must include reasons for the selection of one generally accepted accounting method over another generally accepted accounting method.

Generally, an acid-test ratio of 2 to 1 is preferable to a working capital ratio of 2 to 1.

Which of the following analytical techniques would best be used to compare a company's performance to that of its competitors over time?

Vertical analysis of financial statements refers to the development of percentages indicating the proportionate changes in selected financial statements for two or more reporting periods.

Which of the following is not known as a solvency ratio?

JMR Company has a current ratio of 1.3:1.What does this tell you about the Company? What other information would you like to know?

Return on investment (of a corporation)is affected by the market price of its shares.

Which of the following transactions would increase a company's positive current ratio?

A company decides to pay off some of its current liabilities with cash.Before doing so the company had a current ratio of 1.After paying these liabilities, the company's current ratio will improve.

A financial statement analyst will look at the cash flow statement for all of the following except:

The negotiating of a collective agreement is a contractual decision that may necessitate the use of financial analysis.

Compute the return on assets for the entire corporation.

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