Question 1

Nonrecurring items such as a loss from discontinued operations is reported on the income statement:

Accepted Answer

A)  net of income tax. 
B)  before income tax expense. 
C)  below the net income line. 
D)  Nonrecurring items are not subject to income taxes; therefore, they are not reported on the income statement. 
A)  net of income tax. 
B)  before income tax expense. 
C)  below the net income line. 
D)  Nonrecurring items are not subject to income taxes; therefore, they are not reported on the income statement.

Question 2

Which of these are solvency ratios?

Accepted Answer

A)  Debt-to-assets 
B)  Current ratio 
C)  Return on equity 
D)  Net profit margin 
A)  Debt-to-assets 
B)  Current ratio 
C)  Return on equity 
D)  Net profit margin

Question 3

E.Choudhury Company's price/earnings ratio is 15.3.Its closest competitor,Bhatt,Inc.has a Price/Earnings ratio of 9.4.Which of the following would not be a valid conclusion to draw from a comparison of the two companies' Price/Earnings ratios?

Accepted Answer

A)  E. Choudhury Company's stock is overpriced. 
B)  Investors believe E. Choudhury Co. has a brighter future than Bhatt, Inc. 
C)  E. Choudhury Company has been more profitable than Bhatt, Inc. 
D)  The stock price of E. Choudhury Company has been bid up due to rumors of a merger. 
A)  E. Choudhury Company's stock is overpriced. 
B)  Investors believe E. Choudhury Co. has a brighter future than Bhatt, Inc. 
C)  E. Choudhury Company has been more profitable than Bhatt, Inc. 
D)  The stock price of E. Choudhury Company has been bid up due to rumors of a merger.

Question 4

Benchmarks are required to evaluate a company's performance.

Accepted Answer

A) True 
 B)False

Question 5

If you wish to examine how one aspect of a business is doing relative to other aspects of the business at the current time,you are most likely to use:

Accepted Answer

A)  time-series analysis. 
B)  ratio analysis. 
C)  horizontal analysis. D cross-sectional analysis. 
A)  time-series analysis. 
B)  ratio analysis. 
C)  horizontal analysis. D cross-sectional analysis.

Question 6

Special items reported as part of comprehensive income,but not included in net income,might include:

Accepted Answer

A)  gains or losses on foreign currency exchange. 
B)  interest expense. 
C)  extraordinary gains and losses. 
D)  income tax expense. 
A)  gains or losses on foreign currency exchange. 
B)  interest expense. 
C)  extraordinary gains and losses. 
D)  income tax expense.

Question 7

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Accepted Answer

A)  Liquidity 
B)  Market share 
C)  Profitability 
D)  Solvency 
A)  Liquidity 
B)  Market share 
C)  Profitability 
D)  Solvency

Question 8

Which of the following ratios is used to evaluate how efficient a company is in using its fixed assets to generate revenues?

Accepted Answer

A)  Current ratio 
B)  Debt-to-assets ratio 
C)  Return on fixed assets ratio 
D)  Fixed asset turnover ratio 
A)  Current ratio 
B)  Debt-to-assets ratio 
C)  Return on fixed assets ratio 
D)  Fixed asset turnover ratio

Question 9

Which of the following ratios is calculated by dividing current assets by current liabilities?

Accepted Answer

A)  Quick ratio 
B)  Solvency ratio 
C)  Debt ratio 
D)  Current ratio 
A)  Quick ratio 
B)  Solvency ratio 
C)  Debt ratio 
D)  Current ratio

Question 10

Which of the following ratios does not use net income in its calculation?

Accepted Answer

A)  Net profit margin 
B)  Earnings per share 
C)  Return on equity 
D)  Fixed asset turnover 
A)  Net profit margin 
B)  Earnings per share 
C)  Return on equity 
D)  Fixed asset turnover

Nonrecurring items such as a loss from discontinued operations is reported on the income statement:

Which of these are solvency ratios?

E.Choudhury Company's price/earnings ratio is 15.3.Its closest competitor,Bhatt,Inc.has a Price/Earnings ratio of 9.4.Which of the following would not be a valid conclusion to draw from a comparison of the two companies' Price/Earnings ratios?

Benchmarks are required to evaluate a company's performance.

If you wish to examine how one aspect of a business is doing relative to other aspects of the business at the current time,you are most likely to use:

Special items reported as part of comprehensive income,but not included in net income,might include:

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Which of the following ratios is used to evaluate how efficient a company is in using its fixed assets to generate revenues?

Which of the following ratios is calculated by dividing current assets by current liabilities?

Which of the following ratios does not use net income in its calculation?

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Filters

Exam 13: Measuring and Evaluating Financial Performance

Nonrecurring items such as a loss from discontinued operations is reported on the income statement:

Which of these are solvency ratios?

E.Choudhury Company's price/earnings ratio is 15.3.Its closest competitor,Bhatt,Inc.has a Price/Earnings ratio of 9.4.Which of the following would not be a valid conclusion to draw from a comparison of the two companies' Price/Earnings ratios?

Benchmarks are required to evaluate a company's performance.

If you wish to examine how one aspect of a business is doing relative to other aspects of the business at the current time,you are most likely to use:

Special items reported as part of comprehensive income,but not included in net income,might include:

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Which of the following ratios is used to evaluate how efficient a company is in using its fixed assets to generate revenues?

Which of the following ratios is calculated by dividing current assets by current liabilities?

Which of the following ratios does not use net income in its calculation?

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Filters