Question 1

A company reported the following amounts of net income:   Which of the following is the percentage change from Year 2 to Year 3?

Accepted Answer

A) 40.00% 
B) 50.00% 
C) 110.00% 
D) 150.00% 
A) 40.00% 
B) 50.00% 
C) 110.00% 
D) 150.00%

Question 2

The current ratio is the most widely used ratio to measure a company's ability to pay current liabilities.

Accepted Answer

A) True 
 B)False

Question 3

Presented are the income statements of Knopf and Simon Publications companies for the current year:   Which company has the best inventory turnover rate?

Accepted Answer

A) Both have the same rate 
B) Impossible to determine 
C) Simon 
D) Knopf 
A) Both have the same rate 
B) Impossible to determine 
C) Simon 
D) Knopf

Question 4

The following information relates to Woolf Unlimited for the past two years.   What is the price-earnings ratio for the current year?

Accepted Answer

A) 13.33 
B) 1.75 
C) 13.00 
D) 10.00 
A) 13.33 
B) 1.75 
C) 13.00 
D) 10.00

Question 5

The Hummel Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year.   Inventory and prepaid expenses account for $28,000 of the current year's current assets.
Average inventory for the current year is $12,000.
Average net accounts receivable for the current year is $32,000.
There are 40,000 shares of common stock outstanding.
Total dividends paid during the current year were $60,000.
The market price per share of common stock is $25.
What is the company's days' sales in receivables for the current year?

Accepted Answer

A) 42.00 days 
B) 1.20 days 
C) 25.00 days 
D) 14.60 days 
A) 42.00 days 
B) 1.20 days 
C) 25.00 days 
D) 14.60 days

Question 6

The following information relates to Bennett Corporation.
   Required:
a. What is the acid-test ratio for the current year?
b. What is the inventory turnover for the current year?
c. What is days' sales in receivables for the current year?
d. What is the book value per share of common stock for the current year?
e. What is the price-earnings ratio for the current year?
f. What is the rate of return on total assets for the current year?
g. What is the times-interest-earned ratio for the current year?
h. What is the current ratio for the current year?

Accepted Answer

Part a.
 @#IMG-DLM& Part b.
 @#IMG-DLM&

Question 7

Taylor Company reported the following information for the current year:   What would a vertical analysis report with respect to current year selling and general expenses?

Accepted Answer

A) An increase of $57,768 
B) 19% of net sales revenue 
C) A decrease of 82.80% 
D) 25% of net sales revenue 
A) An increase of $57,768 
B) 19% of net sales revenue 
C) A decrease of 82.80% 
D) 25% of net sales revenue

Question 8

The Hummel Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year.   Inventory and prepaid expenses account for $28,000 of the current year's current assets.
Average inventory for the current year is $12,000.
Average net accounts receivable for the current year is $32,000.
There are 40,000 shares of common stock outstanding.
Total dividends paid during the current year were $60,000.
The market price per share of common stock is $25.
What is the company's price-earnings ratio for the current year?

Accepted Answer

A) 2.00 
B) 3.50 
C) 12.50 
D) 0.08 
A) 2.00 
B) 3.50 
C) 12.50 
D) 0.08

Question 9

Managers use a variety of financial ratios to evaluate a company's performance.

Accepted Answer

A) True 
 B)False

Question 10

The Stemple Corporation data for the current year:   What would a horizontal analysis report with respect to common stock?

Accepted Answer

A) An increase of 6.89 in sales revenue 
B) Increase of $6,000 in common stock 
C) An increase of 85.37% from prior to current year 
D) Sales return of $9.16 
A) An increase of 6.89 in sales revenue 
B) Increase of $6,000 in common stock 
C) An increase of 85.37% from prior to current year 
D) Sales return of $9.16

Question 11

Trend analysis is the same thing as a vertical analysis.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is the formula to compute day's sales in receivable?

Accepted Answer

A) Cost of goods sold/average inventory 
B) Net credit sales/average inventory 
C) Net credit sales/average net accounts receivable 
D) Average net accounts receivable/one day's sales 
A) Cost of goods sold/average inventory 
B) Net credit sales/average inventory 
C) Net credit sales/average net accounts receivable 
D) Average net accounts receivable/one day's sales

Question 13

A company's ability to pay liabilities with current assets is measured by which of the following ratios?

Accepted Answer

A) Inventory turnover ratio 
B) Day's sales in receivables 
C) Acid-test ratio 
D) Current ratio 
A) Inventory turnover ratio 
B) Day's sales in receivables 
C) Acid-test ratio 
D) Current ratio

Question 14

The following information relates to Woolf Unlimited for the past two years.   What is the current ratio for the current year?

Accepted Answer

A) 1.00 
B) 13.00 
C) 1.75 
D) 2.30 
A) 1.00 
B) 13.00 
C) 1.75 
D) 2.30

Question 15

Use the following information about The Conley Company to do a vertical analysis of the income statement for the current year. Fill in the missing components in the table.

Accepted Answer

The answer of Use the following information about The Conley...

Question 16

Investors and creditors generally evaluate a company by using a single year's data.

Accepted Answer

A) True 
 B)False

Question 17

The Stemple Corporation data for the current year:   What would a horizontal analysis report with respect to net sales revenue?

Accepted Answer

A) Cost of goods sold as 80.67% of net sales revenue 
B) A sales return of 9.16% 
C) An increase of 19.00% in net sales revenue 
D) Accounts receivable turnover of 8.06 times 
A) Cost of goods sold as 80.67% of net sales revenue 
B) A sales return of 9.16% 
C) An increase of 19.00% in net sales revenue 
D) Accounts receivable turnover of 8.06 times

Question 18

The formula to compute the acid-test ratio is

Accepted Answer

A) (cash + short-term investments + net current receivables)/current assets. 
B) (cash + short-term investments + net current receivables)/current liabilities. 
C) current liabilities/current assets. 
D) currents assets/current liabilities. 
A) (cash + short-term investments + net current receivables)/current assets. 
B) (cash + short-term investments + net current receivables)/current liabilities. 
C) current liabilities/current assets. 
D) currents assets/current liabilities.

Question 19

Presented are the income statements of Currence and Stever Publications companies for the current year:   Which company has the better relationship between net income and net sales revenue?

Accepted Answer

A) Impossible to determine 
B) Both have the same relationship 
C) Currence 
D) Stever 
A) Impossible to determine 
B) Both have the same relationship 
C) Currence 
D) Stever

Question 20

The formula to compute the current ratio is

Accepted Answer

A) (cash + short-term investments + net current liabilities)/current liabilities. 
B) (current liabilities +short-term investments + net current receivables)divided by current assets. 
C) current liabilities/current assets. 
D) current assets/current liabilities. 
A) (cash + short-term investments + net current liabilities)/current liabilities. 
B) (current liabilities +short-term investments + net current receivables)divided by current assets. 
C) current liabilities/current assets. 
D) current assets/current liabilities.

A company reported the following amounts of net income: Which of the following is the percentage change from Year 2 to Year 3?

The current ratio is the most widely used ratio to measure a company's ability to pay current liabilities.

Presented are the income statements of Knopf and Simon Publications companies for the current year: Which company has the best inventory turnover rate?

The following information relates to Woolf Unlimited for the past two years. What is the price-earnings ratio for the current year?

Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to current year selling and general expenses?

Managers use a variety of financial ratios to evaluate a company's performance.

The Stemple Corporation data for the current year: What would a horizontal analysis report with respect to common stock?

Trend analysis is the same thing as a vertical analysis.

Which of the following is the formula to compute day's sales in receivable?

A company's ability to pay liabilities with current assets is measured by which of the following ratios?

The following information relates to Woolf Unlimited for the past two years. What is the current ratio for the current year?

Use the following information about The Conley Company to do a vertical analysis of the income statement for the current year. Fill in the missing components in the table.

Investors and creditors generally evaluate a company by using a single year's data.

The Stemple Corporation data for the current year: What would a horizontal analysis report with respect to net sales revenue?

The formula to compute the acid-test ratio is

Presented are the income statements of Currence and Stever Publications companies for the current year: Which company has the better relationship between net income and net sales revenue?

The formula to compute the current ratio is

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Sustainability

Filters

Exam 14: Financial Statement Analysis

A company reported the following amounts of net income: Which of the following is the percentage change from Year 2 to Year 3?

The current ratio is the most widely used ratio to measure a company's ability to pay current liabilities.

Presented are the income statements of Knopf and Simon Publications companies for the current year: Which company has the best inventory turnover rate?

The following information relates to Woolf Unlimited for the past two years. What is the price-earnings ratio for the current year?

Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to current year selling and general expenses?

Managers use a variety of financial ratios to evaluate a company's performance.

The Stemple Corporation data for the current year: What would a horizontal analysis report with respect to common stock?

Trend analysis is the same thing as a vertical analysis.

Which of the following is the formula to compute day's sales in receivable?

A company's ability to pay liabilities with current assets is measured by which of the following ratios?

The following information relates to Woolf Unlimited for the past two years. What is the current ratio for the current year?

Use the following information about The Conley Company to do a vertical analysis of the income statement for the current year. Fill in the missing components in the table.

Investors and creditors generally evaluate a company by using a single year's data.

The Stemple Corporation data for the current year: What would a horizontal analysis report with respect to net sales revenue?

The formula to compute the acid-test ratio is

Presented are the income statements of Currence and Stever Publications companies for the current year: Which company has the better relationship between net income and net sales revenue?

The formula to compute the current ratio is

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Sustainability

Filters