Question 1

Which of the following should be classified as an extraordinary item on the income statement?

Accepted Answer

A)  gain on a sale of a long-term investment 
B)  loss due to discontinued operations 
C)  restructuring charges 
D)  loss resulting from an infrequent natural disaster 
A)  gain on a sale of a long-term investment 
B)  loss due to discontinued operations 
C)  restructuring charges 
D)  loss resulting from an infrequent natural disaster

Question 2

Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

Accepted Answer

A)  ratio of fixed assets to long-term liabilities 
B)  ratio of net sales to assets 
C)  number of days' sales in receivables 
D)  rate earned on stockholders' equity 
A)  ratio of fixed assets to long-term liabilities 
B)  ratio of net sales to assets 
C)  number of days' sales in receivables 
D)  rate earned on stockholders' equity

Question 3

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.         What is the current ratio?

Accepted Answer

A)  1.42 
B)  0.78 
C)  1.58 
D)  0.67 
A)  1.42 
B)  0.78 
C)  1.58 
D)  0.67

Question 4

What information is generally included in the Management Discussion and Analysis (MD&A) section of a corporate annual report?

Accepted Answer

The MD&A section typically includes:  
M

Question 5

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Accepted Answer

A) True 
 B)False

Question 6

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are

Accepted Answer

A)  a substitute for sound judgment 
B)  useful analytical measures 
C)  enough information for analysis; industry information is not needed 
D)  unnecessary for analysis, but reaction is better 
A)  a substitute for sound judgment 
B)  useful analytical measures 
C)  enough information for analysis; industry information is not needed 
D)  unnecessary for analysis, but reaction is better

Question 7

The numerator of the rate earned on common stockholders' equity ratio is

Accepted Answer

A)  net income 
B)  net income minus preferred dividends 
C)  income before income tax 
D)  operating income minus interest expense 
A)  net income 
B)  net income minus preferred dividends 
C)  income before income tax 
D)  operating income minus interest expense

Question 8

What type of analysis is indicated by the following?

Accepted Answer

A)  vertical analysis 
B)  horizontal analysis 
C)  liquidity analysis 
D)  common-size analysis 
A)  vertical analysis 
B)  horizontal analysis 
C)  liquidity analysis 
D)  common-size analysis

Question 9

Current position analysis measures a company's ability to pay its current liabilities.

Accepted Answer

A) True 
 B)False

Question 10

Using vertical analysis of the income statement, a company's net income as a percentage of sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

Accepted Answer

A) True 
 B)False

Question 11

Based on the above data, what is the quick ratio, rounded to one decimal point?

Accepted Answer

A)  1.7 
B)  2.9 
C)  1.1 
D)  1.0 
A)  1.7 
B)  2.9 
C)  1.1 
D)  1.0

Question 12

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

Accepted Answer

A) True 
 B)False

Question 13

The following information pertains to Dallas Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.        
What is the rate earned on stockholders' equity?

Accepted Answer

A)  7.3% 
B)  13.6% 
C)  20.5% 
D)  40.9% 
A)  7.3% 
B)  13.6% 
C)  20.5% 
D)  40.9%

Question 14

Comparable financial statements are designed to compare the financial statements of two or more corporations.

Accepted Answer

A) True 
 B)False

Question 15

The balance sheet for Seuss Company at the end of the current fiscal year indicated the following:   
Income before income tax was $1,500,000 and income taxes were $200,000 for the current year.  Cash dividends paid on common stock during the current year totaled $150,000.The common stock sells for $70 per share at the end of the year. 
Determine each of the following: 
(a) Number of times interest charges are earned 
(b) Earnings per share on common stock 
(c) Price-earnings ratio 
(d) Dividends per share of common stock 
(e) Dividend yield 
Round to one decimal place except earnings per share and dividends per share, which should be rounded to two decimal places.

Accepted Answer

(a) Number of times interest charges are

Question 16

Based on the above data, what is the amount of working capital?

Accepted Answer

A)  $238,000 
B)  $128,000 
C)  $168,000 
D)  $203,000 
A)  $238,000 
B)  $128,000 
C)  $168,000 
D)  $203,000

Question 17

Based on the following data, what is the accounts receivable turnover?

Accepted Answer

A)  17.5 
B)  2.6 
C)  20.0 
D)  15.5 
A)  17.5 
B)  2.6 
C)  20.0 
D)  15.5

Question 18

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

Accepted Answer

The answer of The following items are reported on a...

Question 19

The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.

Accepted Answer

A) True 
 B)False

Question 20

If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable on account will cause the ratio to decrease.

Accepted Answer

A) True 
 B)False

Which of the following should be classified as an extraordinary item on the income statement?

Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

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. What is the current ratio?

What information is generally included in the Management Discussion and Analysis (MD&A) section of a corporate annual report?

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are

The numerator of the rate earned on common stockholders' equity ratio is

What type of analysis is indicated by the following?

Current position analysis measures a company's ability to pay its current liabilities.

Using vertical analysis of the income statement, a company's net income as a percentage of sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

Based on the above data, what is the quick ratio, rounded to one decimal point?

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

The following information pertains to Dallas Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the rate earned on stockholders' equity?

Comparable financial statements are designed to compare the financial statements of two or more corporations.

Based on the above data, what is the amount of working capital?

Based on the following data, what is the accounts receivable turnover?

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

The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.

If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable on account will cause the ratio to decrease.

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

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

Statement of Cash Flows

Filters

Exam 14: Financial Statement Analysis

Which of the following should be classified as an extraordinary item on the income statement?

Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

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. What is the current ratio?

What information is generally included in the Management Discussion and Analysis (MD&A) section of a corporate annual report?

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are

The numerator of the rate earned on common stockholders' equity ratio is

What type of analysis is indicated by the following?

Current position analysis measures a company's ability to pay its current liabilities.

Using vertical analysis of the income statement, a company's net income as a percentage of sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

Based on the above data, what is the quick ratio, rounded to one decimal point?

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

The following information pertains to Dallas Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the rate earned on stockholders' equity?

Comparable financial statements are designed to compare the financial statements of two or more corporations.

Based on the above data, what is the amount of working capital?

Based on the following data, what is the accounts receivable turnover?

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

The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.

If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable on account will cause the ratio to decrease.

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

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

Statement of Cash Flows

Filters