Question 1

Ratio analysis is aided by the presentation of comparative statements.

Accepted Answer

A) True 
 B)False

Question 2

In a popular business journal,JMR Ltd.was compared to KAR Corp.for the year ended December 31,20x14.This is an example of:

Accepted Answer

A)  Cross-sectional comparison. 
B)  Historical comparison. 
C)  Yearly comparison. 
D)  Longitudinal comparison. 
E)  Industrial comparison. 
A)  Cross-sectional comparison. 
B)  Historical comparison. 
C)  Yearly comparison. 
D)  Longitudinal comparison. 
E)  Industrial comparison.

Question 3

The quick (or acid-test)ratio always will be less than,or equal to,the current ratio.

Accepted Answer

A) True 
 B)False

Question 4

LMN reported the following 2014 data in 000's:   LMN's average age of the receivables was (in days): (Assume 360 days in a year)

Accepted Answer

A)  37 days. 
B)  61 days. 
C)  91 days. 
D)  115 days. 
E)  None of these choices are correct. 
A)  37 days. 
B)  61 days. 
C)  91 days. 
D)  115 days. 
E)  None of these choices are correct.

Question 5

Vertical analysis of financial statements refers to a comparison of amounts which are expressed in terms of a base amount that is from a:

Accepted Answer

A)  financial summary. 
B)  previous time period. 
C)  common size statement. 
D)  specific amount that is on the same financial statement. 
E)  either previous time period or common size statement. 
A)  financial summary. 
B)  previous time period. 
C)  common size statement. 
D)  specific amount that is on the same financial statement. 
E)  either previous time period or common size statement.

Question 6

GHI Inc.has three subsidiaries,Computers,Magazines and Cable TV.Sales,net income and asset data for the most recent year is shown below by subsidiary:   Compute the return on assets for the entire corporation.

Accepted Answer

@#IMG-DLM& ROA = $1,

Question 7

The following data was reported by JSB for a two-year period:   Assets:   Liabilities:   *Includes interest expense,$2,500 (pre-tax)
(a)Compute the following ratios for 20x12:
(1)Receivable turnover
(2)Inventory turnover
(3)Creditors' equity to total assets
(4)Acid test ratio
(5)Return on owners' equity
(6)Profit margin on sales
(7)Current ratio
(8)Return on total assets
(9)Owners' equity to total assets
(10)Financial leverage
(b)Briefly explain and interpret financial leverage.

Accepted Answer

(a) @#IMG-DLM& (b)The measure of financial leverag

Question 8

Ryan Company analyzed its financial statements for the year ended December 31.During its analysis,Ryan Company compared the accounts receivable balance from 2014 to 2013.This type of analysis is called:

Accepted Answer

A)  Cross-sectional comparison. 
B)  Sectional comparison. 
C)  Account comparison. 
D)  Longitudinal comparison. 
A)  Cross-sectional comparison. 
B)  Sectional comparison. 
C)  Account comparison. 
D)  Longitudinal comparison.

Question 9

Which of the following ratios is an indicator of liquidity?

Accepted Answer

A)  The Current Ratio. 
B)  The Inventory Turnover Ratio 
C)  The Age of Receivables Ratio. 
D)  The Debt-to-Total Assets Ratio. 
A)  The Current Ratio. 
B)  The Inventory Turnover Ratio 
C)  The Age of Receivables Ratio. 
D)  The Debt-to-Total Assets Ratio.

Question 10

A debt-equity ratio in excess of 1 indicates that a majority of the entity's resources was provided by the shareholders' or is reflected in shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 11

To apply a vertical analysis to the balance sheet,the base amount usually selected is:

Accepted Answer

A)  total assets. 
B)  total liabilities. 
C)  total shareholders' equity. 
D)  total revenues. 
E)  either total liabilities or total shareholders' equity. 
A)  total assets. 
B)  total liabilities. 
C)  total shareholders' equity. 
D)  total revenues. 
E)  either total liabilities or total shareholders' equity.

Question 12

The following information for JG Ltd.is available to you:   Required:
1.Calculate the accounts receivable turnover ratio
2.You determined that the industry average was 4.5 and that JG Ltd.had turnovers in previous years of 3.5,3.8,4.4,and 4.7.Based on this information,can you make any conclusions?

Accepted Answer

1.1,300,000/546,000 = 2.38
2.JG's ART ra

Question 13

All of the following are examples of regulatory decisions except:

Accepted Answer

A)  negotiating collective agreements. 
B)  need for rate or price increases. 
C)  impact of past regulatory decisions. 
D)  ability to withstand competition. 
A)  negotiating collective agreements. 
B)  need for rate or price increases. 
C)  impact of past regulatory decisions. 
D)  ability to withstand competition.

Question 14

The negotiating of a collective agreement is a contractual decision that may necessitate the use of financial analysis.

Accepted Answer

A) True 
 B)False

Question 15

If a company's ratio of net income to net sales (generally referred to as profit margin on sales)is low,then its return on investment will be low.

Accepted Answer

A) True 
 B)False

Question 16

A clean opinion is another term to describe a company that has received an unqualified audit report.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a list of the types of auditors' opinions going from worst to best?

Accepted Answer

A)  Unqualified, qualified, adverse, disclaimer 
B)  Qualified, disclaimer, adverse, unqualified 
C)  Disclaimer, unqualified, adverse, qualified 
D)  Disclaimer, unqualified, qualified, adverse 
E)  None of these choices are correct. 
A)  Unqualified, qualified, adverse, disclaimer 
B)  Qualified, disclaimer, adverse, unqualified 
C)  Disclaimer, unqualified, adverse, qualified 
D)  Disclaimer, unqualified, qualified, adverse 
E)  None of these choices are correct.

Question 18

RST has provided the following information in 000's on selected cash transactions for 2014:   What is the increase in working capital for the year ended December 31,2014,as a result of the above information?

Accepted Answer

A)  $400 
B)  $4,000 
C)  $5,600 
D)  None of these choices are correct. 
A)  $400 
B)  $4,000 
C)  $5,600 
D)  None of these choices are correct.

Question 19

If treasury stock is purchased and retired at a cost in excess of its book value,book value per share (for the remaining shares)will decrease.

Accepted Answer

A) True 
 B)False

Question 20

Disclosure of significant accounting policies results from application of the:

Accepted Answer

A)  full disclosure principle. 
B)  consistency principle. 
C)  reliability principle. 
D)  matching principle. 
A)  full disclosure principle. 
B)  consistency principle. 
C)  reliability principle. 
D)  matching principle.

Ratio analysis is aided by the presentation of comparative statements.

In a popular business journal,JMR Ltd.was compared to KAR Corp.for the year ended December 31,20x14.This is an example of:

The quick (or acid-test)ratio always will be less than,or equal to,the current ratio.

LMN reported the following 2014 data in 000's: LMN's average age of the receivables was (in days): (Assume 360 days in a year)

Vertical analysis of financial statements refers to a comparison of amounts which are expressed in terms of a base amount that is from a:

GHI Inc.has three subsidiaries,Computers,Magazines and Cable TV.Sales,net income and asset data for the most recent year is shown below by subsidiary: Compute the return on assets for the entire corporation.

Ryan Company analyzed its financial statements for the year ended December 31.During its analysis,Ryan Company compared the accounts receivable balance from 2014 to 2013.This type of analysis is called:

Which of the following ratios is an indicator of liquidity?

A debt-equity ratio in excess of 1 indicates that a majority of the entity's resources was provided by the shareholders' or is reflected in shareholders' equity.

To apply a vertical analysis to the balance sheet,the base amount usually selected is:

The following information for JG Ltd.is available to you: Required: 1.Calculate the accounts receivable turnover ratio 2.You determined that the industry average was 4.5 and that JG Ltd.had turnovers in previous years of 3.5,3.8,4.4,and 4.7.Based on this information,can you make any conclusions?

All of the following are examples of regulatory decisions except:

The negotiating of a collective agreement is a contractual decision that may necessitate the use of financial analysis.

If a company's ratio of net income to net sales (generally referred to as profit margin on sales)is low,then its return on investment will be low.

A clean opinion is another term to describe a company that has received an unqualified audit report.

Which of the following is a list of the types of auditors' opinions going from worst to best?

RST has provided the following information in 000's on selected cash transactions for 2014: What is the increase in working capital for the year ended December 31,2014,as a result of the above information?

If treasury stock is purchased and retired at a cost in excess of its book value,book value per share (for the remaining shares)will decrease.

Disclosure of significant accounting policies results from application of the:

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Revenue Recognition

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Long-Lived Assets

Depreciation, Amortization, and Impairment

Filters

Exam 11: Financial Instruments: Investments in Bonds and Equity Securities

Ratio analysis is aided by the presentation of comparative statements.

In a popular business journal,JMR Ltd.was compared to KAR Corp.for the year ended December 31,20x14.This is an example of:

The quick (or acid-test)ratio always will be less than,or equal to,the current ratio.

LMN reported the following 2014 data in 000's: LMN's average age of the receivables was (in days): (Assume 360 days in a year)

Vertical analysis of financial statements refers to a comparison of amounts which are expressed in terms of a base amount that is from a:

GHI Inc.has three subsidiaries,Computers,Magazines and Cable TV.Sales,net income and asset data for the most recent year is shown below by subsidiary: Compute the return on assets for the entire corporation.

Ryan Company analyzed its financial statements for the year ended December 31.During its analysis,Ryan Company compared the accounts receivable balance from 2014 to 2013.This type of analysis is called:

Which of the following ratios is an indicator of liquidity?

A debt-equity ratio in excess of 1 indicates that a majority of the entity's resources was provided by the shareholders' or is reflected in shareholders' equity.

To apply a vertical analysis to the balance sheet,the base amount usually selected is:

The following information for JG Ltd.is available to you: Required: 1.Calculate the accounts receivable turnover ratio 2.You determined that the industry average was 4.5 and that JG Ltd.had turnovers in previous years of 3.5,3.8,4.4,and 4.7.Based on this information,can you make any conclusions?

All of the following are examples of regulatory decisions except:

The negotiating of a collective agreement is a contractual decision that may necessitate the use of financial analysis.

If a company's ratio of net income to net sales (generally referred to as profit margin on sales)is low,then its return on investment will be low.

A clean opinion is another term to describe a company that has received an unqualified audit report.

Which of the following is a list of the types of auditors' opinions going from worst to best?

RST has provided the following information in 000's on selected cash transactions for 2014: What is the increase in working capital for the year ended December 31,2014,as a result of the above information?

If treasury stock is purchased and retired at a cost in excess of its book value,book value per share (for the remaining shares)will decrease.

Disclosure of significant accounting policies results from application of the:

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Revenue Recognition

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Long-Lived Assets

Depreciation, Amortization, and Impairment

Filters