Question 1

In a common-sized income statement, 100% is the

Accepted Answer

A) net cost of goods sold 
B) net income 
C) gross profit 
D) sales 
A) net cost of goods sold 
B) net income 
C) gross profit 
D) sales

Question 2

Match each ratio that follows to its use (items a-h). Items may be used more than once.
-ratio of liabilities to stockholders' equity

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 3

For the current year, Lynx Company's comprehensive income was $245,000 and its net income was $198,000. What is Lynx Company's other comprehensive income?

Accepted Answer

Lynx Company's other comprehensive incom

Question 4

Zeus Company reports the following for the current year:   *Net of any tax effect
(a)Prepare a partial income statement for Zeus Company beginning with income from continuing operations before income tax.(b)Calculate the earnings per common share for Zeus.

Accepted Answer

The answer of Zeus Company reports the following for the...

Question 5

When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item after income from continuing operations on the income statement.

Accepted Answer

A) True 
 B)False

Question 6

Cash and accounts receivable for Ashfall Co. are provided below:   Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Round percentages to one decimal place.

Accepted Answer

Cash
$4,400 increase ($62,400

Question 7

A loss on disposal of a segment would be reported in the income statement as a(n)

Accepted Answer

A) administrative expense 
B) other expense 
C) deduction from income from continuing operations 
D) selling expense 
A) administrative expense 
B) other expense 
C) deduction from income from continuing operations 
D) selling expense

Question 8

Match each definition that follows with the term (a-h) it defines.
-a company's ability to make interest payments and repay debt at maturity

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 9

Define solvency and profitability. How are they alike?

Accepted Answer

Solvency is the ability of a company to

Question 10

The relationship of $325,000 to $125,000, expressed as a ratio, is

Accepted Answer

A) 2.0 
B) 2.6 
C) 2.5 
D) 0.45 
A) 2.0 
B) 2.6 
C) 2.5 
D) 0.45

Question 11

Hsu Company reported the following on its income statement:   Interest expense was $80,000. Hsu Company's times interest earned ratio is

Accepted Answer

A) 8 times 
B) 6.25 times 
C) 5.25 times 
D) 5 times 
A) 8 times 
B) 6.25 times 
C) 5.25 times 
D) 5 times

Question 12

The ratio of the sum of cash, receivables, and marketable securities to current liabilities is referred to as the current ratio.

Accepted Answer

A) True 
 B)False

Question 13

An increase in the accounts receivable turnover may be due to a change in how credit is granted and/or in collection practices.

Accepted Answer

A) True 
 B)False

Question 14

Match each ratio that follows to its use (items a-h). Items may be used more than once.
-quick 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 15

An advantage of the current ratio is that it considers the makeup of the current assets.

Accepted Answer

A) True 
 B)False

Question 16

Current position analysis is used by short-term creditors to assess how quickly they will be repaid.

Accepted Answer

A) True 
 B)False

Question 17

Match each definition that follows with the term (a-h) it defines.
-use debt to increase the return on an investment

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 18

A company reports the following:   Determine the (a) accounts receivable turnover, and (b) number of days' sales in receivables. Round your answer to one
decimal place.

Accepted Answer

(a)Accounts receivable turnover = Sales/

Question 19

Which of the following is not included in the computation of the quick ratio?

Accepted Answer

A) inventory 
B) marketable securities 
C) accounts receivable 
D) cash 
A) inventory 
B) marketable securities 
C) accounts receivable 
D) cash

Question 20

A company can compare its financial data to the data of other companies and industry averages to evaluate its position.

Accepted Answer

A) True 
 B)False

Exam 14: Financial Statement Analysis

In a common-sized income statement, 100% is the

Match each ratio that follows to its use (items a-h). Items may be used more than once. -ratio of liabilities to stockholders' equity

For the current year, Lynx Company's comprehensive income was $245,000 and its net income was $198,000. What is Lynx Company's other comprehensive income?

Zeus Company reports the following for the current year: *Net of any tax effect (a)Prepare a partial income statement for Zeus Company beginning with income from continuing operations before income tax.(b)Calculate the earnings per common share for Zeus.

When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item after income from continuing operations on the income statement.

Cash and accounts receivable for Ashfall Co. are provided below: Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Round percentages to one decimal place.

A loss on disposal of a segment would be reported in the income statement as a(n)

Match each definition that follows with the term (a-h) it defines. -a company's ability to make interest payments and repay debt at maturity

Define solvency and profitability. How are they alike?

The relationship of $325,000 to $125,000, expressed as a ratio, is

Hsu Company reported the following on its income statement: Interest expense was $80,000. Hsu Company's times interest earned ratio is

The ratio of the sum of cash, receivables, and marketable securities to current liabilities is referred to as the current ratio.

An increase in the accounts receivable turnover may be due to a change in how credit is granted and/or in collection practices.

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

An advantage of the current ratio is that it considers the makeup of the current assets.

Current position analysis is used by short-term creditors to assess how quickly they will be repaid.

Match each definition that follows with the term (a-h) it defines. -use debt to increase the return on an investment

A company reports the following: Determine the (a) accounts receivable turnover, and (b) number of days' sales in receivables. Round your answer to one decimal place.

Which of the following is not included in the computation of the quick ratio?

A company can compare its financial data to the data of other companies and industry averages to evaluate its position.

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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