Question 1

The dividend yield is equal to the dividends per share divided by the par value per share of common stock.

Accepted Answer

A) True 
 B)False

Question 2

Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.Assets   Liabilities and Stockholders' Equity   Income Statement     What is the current ratio?

Accepted Answer

A) 1.42 
B) 1.17 
C) 1.58 
D) 0.67 
A) 1.42 
B) 1.17 
C) 1.58 
D) 0.67

Question 3

A clean audit opinion is not the same as an unmodified opinion.

Accepted Answer

A) True 
 B)False

Question 4

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.Assets   Liabilities and Stockholders' Equity   Income Statement    
-What is the asset turnover for Diane Company?

Accepted Answer

A) 1.00 
B) 2.94 
C) 0.18 
D) 0.34 
A) 1.00 
B) 2.94 
C) 0.18 
D) 0.34

Question 5

Times interest earned is computed as

Accepted Answer

A) net income plus interest expense, divided by interest expense 
B) income before income tax plus interest expense, divided by interest expense 
C) net income divided by interest expense 
D) income before income tax divided by interest expense 
A) net income plus interest expense, divided by interest expense 
B) income before income tax plus interest expense, divided by interest expense 
C) net income divided by interest expense 
D) income before income tax divided by interest expense

Question 6

Which of the following is required by the Sarbanes-Oxley Act?

Accepted Answer

A) a price-earnings ratio 
B) a report on internal control 
C) a vertical analysis 
D) a common-sized statement 
A) a price-earnings ratio 
B) a report on internal control 
C) a vertical analysis 
D) a common-sized statement

Question 7

Which of the following is not an unusual item?

Accepted Answer

A) a segment of the business being sold 
B) corporate income tax being paid 
C) a change from one accounting method to another acceptable accounting method 
D) closure of all outlet stores 
A) a segment of the business being sold 
B) corporate income tax being paid 
C) a change from one accounting method to another acceptable accounting method 
D) closure of all outlet stores

Question 8

Match each ratio that follows to its use (items a-h). Items may be used more than once.
-current ratio

Accepted Answer

A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders 
A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders

Question 9

-The tendency of the return on stockholders' equity to vary disproportionately from the return on total assets is because of

Accepted Answer

A) leverage 
B) solvency 
C) yield 
D) quick assets 
A) leverage 
B) solvency 
C) yield 
D) quick assets

Question 10

Match each definition that follows with the term (a-h) it defines.
-useful for comparing one company to another or to industry averages

Accepted Answer

A) solvency 
B) leverage 
C) times interest earned 
D) horizontal analysis 
E) vertical analysis
F)common-sized financial statements
G)current position analysis
H)profitability analysis 
A) solvency 
B) leverage 
C) times interest earned 
D) horizontal analysis 
E) vertical analysis
F)common-sized financial statements
G)current position analysis
H)profitability analysis

Question 11

A loss due to a discontinued operation should be reported on the income statement

Accepted Answer

A) above income from continuing operations 
B) without related tax effect 
C) below income from continuing operations 
D) as an operating expense 
A) above income from continuing operations 
B) without related tax effect 
C) below income from continuing operations 
D) as an operating expense

Question 12

The following items are reported on a company's balance sheet:   Determine the (a) current ratio, and (b) quick ratio. Round your answer to one decimal place.

Accepted Answer

(a)Current ratio = Current assets (cash,

Question 13

Ratios and various other analytical measures are not a substitute for sound judgment, nor do they provide definitive guides for action.

Accepted Answer

A) True 
 B)False

Question 14

Accumulated other comprehensive income is presented in the financial statements

Accepted Answer

A) either on the income statement or in a separate statement of comprehensive income. 
B) on the balance sheet as part of stockholders' equity. 
C) on the income statement only. 
D) in a separate statement only. 
A) either on the income statement or in a separate statement of comprehensive income. 
B) on the balance sheet as part of stockholders' equity. 
C) on the income statement only. 
D) in a separate statement only.

Question 15

Why would you or why wouldn't you compare an organization like Ford Motor Company to the local car dealer "Johnson City Ford/Lincoln/Mercury" using vertical and horizontal analysis?

Accepted Answer

Ford Motor Company is an automobile manu

Question 16

The particular analytical measures chosen to analyze a company may be influenced by all of the following except

Accepted Answer

A) industry type 
B) general economic environment 
C) diversity of business operations 
D) product quality or service effectiveness 
A) industry type 
B) general economic environment 
C) diversity of business operations 
D) product quality or service effectiveness

Question 17

Revenue and expense data for Young Technologies Inc. are as follows:   (a)Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round to the nearest whole percent.(b)Comment on the significant changes disclosed by the comparative income statement.

Accepted Answer

@#IMG-DLM& (b)The vertical analysis indicates that

Question 18

In horizontal analysis, the current year is the base year.

Accepted Answer

A) True 
 B)False

Question 19

Based on the following data for the current year, what is the number of days' sales in inventory?

Accepted Answer

A) 51.2 
B) 44.4 
C) 6.5 
D) 7.5 
A) 51.2 
B) 44.4 
C) 6.5 
D) 7.5

Question 20

Manx Company owns one investment, purchased several years ago for $20,000. As of the end of the year two years ago, the investment had increased in value to $26,000. As of the end of the current year, the investment had decreased somewhat in value to $24,000. Manx anticipates selling the investment in the coming year, and expects to receive $28,000. Under fair value accounting, what would be the value of the investments account on the current year's December 31 balance sheet?

Accepted Answer

A) $24,000 
B) $20,000 
C) $26,000 
D) $28,000 
A) $24,000 
B) $20,000 
C) $26,000 
D) $28,000

Exam 14: Financial Statement Analysis

The dividend yield is equal to the dividends per share divided by the par value per share of common stock.

Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.Assets Liabilities and Stockholders' Equity Income Statement What is the current ratio?

A clean audit opinion is not the same as an unmodified opinion.

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.Assets Liabilities and Stockholders' Equity Income Statement -What is the asset turnover for Diane Company?

Times interest earned is computed as

Which of the following is required by the Sarbanes-Oxley Act?

Which of the following is not an unusual item?

Match each ratio that follows to its use (items a-h). Items may be used more than once. -current ratio

-The tendency of the return on stockholders' equity to vary disproportionately from the return on total assets is because of

Match each definition that follows with the term (a-h) it defines. -useful for comparing one company to another or to industry averages

A loss due to a discontinued operation should be reported on the income statement

The following items are reported on a company's balance sheet: Determine the (a) current ratio, and (b) quick ratio. Round your answer to one decimal place.

Ratios and various other analytical measures are not a substitute for sound judgment, nor do they provide definitive guides for action.

Accumulated other comprehensive income is presented in the financial statements

Why would you or why wouldn't you compare an organization like Ford Motor Company to the local car dealer "Johnson City Ford/Lincoln/Mercury" using vertical and horizontal analysis?

The particular analytical measures chosen to analyze a company may be influenced by all of the following except

In horizontal analysis, the current year is the base year.

Based on the following data for the current year, what is the number of days' sales in inventory?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

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