Question 1

One of the most important aspects of analysis of financial statements is the wording of the auditors' report.

Accepted Answer

A) True 
 B)False

Question 2

Common-size analysis is a(n):

Accepted Answer

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

Question 3

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:   Calculate the balance sheet item Long-Term Debt

Accepted Answer

Total Debt

Question 4

In calculating the book value per common share,total owners equity must be allocated to the respective common and preferred.

Accepted Answer

A) True 
 B)False

Question 5

Published financial statements are always the best source of timely information on practically all financial items relevant to investors and creditors.

Accepted Answer

A) True 
 B)False

Question 6

You are given the following information about KER Corp.:   Required:
Calculate KER's quick ratio.

Accepted Answer

C
(45,000

Question 7

You are given the following information about KER Corp.:   Required:
Calculate KER's current ratio.

Accepted Answer

(45,000 + 100,000 +

Question 8

Which of the following transactions would increase a company's positive current ratio?

Accepted Answer

A)  Borrow money on a short-term note 
B)  Repay the principal on a short-term note 
C)  Sell a temporary investment at a loss 
D)  Use the equity method to reflect earnings of an investee 
E)  None of these choices would increase a company's positive current ratio 
A)  Borrow money on a short-term note 
B)  Repay the principal on a short-term note 
C)  Sell a temporary investment at a loss 
D)  Use the equity method to reflect earnings of an investee 
E)  None of these choices would increase a company's positive current ratio

Question 9

A company may decide not to follow GAAP if it does not present them in a favourable position.

Accepted Answer

A) True 
 B)False

Question 10

It is important for the user to understand the financial statements in order to make an informed decision.A user must generally do all of the following except:

Accepted Answer

A)  If an equity investor, will generally use consolidated statements. 
B)  If a lender, will generally use unconsolidated statements. 
C)  All users must be able to evaluate risks. 
D)  All of these choices are correct. 
A)  If an equity investor, will generally use consolidated statements. 
B)  If a lender, will generally use unconsolidated statements. 
C)  All users must be able to evaluate risks. 
D)  All of these choices are correct.

Question 11

A company issuing financial statements would most prefer to receive an auditor's opinion that is:

Accepted Answer

A)  adverse. 
B)  qualified. 
C)  a disclaimer. 
D)  unqualified. 
E)  either qualified or unqualified. 
A)  adverse. 
B)  qualified. 
C)  a disclaimer. 
D)  unqualified. 
E)  either qualified or unqualified.

Question 12

Profit margin on sales is very relevant for purposes of comparison,both between periods and between similar companies.

Accepted Answer

A) True 
 B)False

Question 13

All companies are required to have audits.

Accepted Answer

A) True 
 B)False

Question 14

Return on investment (of a corporation)is affected by the market price of its shares.

Accepted Answer

A) True 
 B)False

Question 15

Information about the significant accounting policies of an entity is not necessary because GAAP prescribes uniform accounting treatment of all items,and it is widely understood.

Accepted Answer

A) True 
 B)False

Question 16

The amount of working capital would not be affected by which of the following transactions?

Accepted Answer

A)  Sale of long-term investments for cash at a loss 
B)  Transfer of a long-term investment for cash 
C)  Issuance of a long-term note in exchange for cash 
D)  Issuance of common shares of the corporation in exchange for noncurrent assets 
E)  All of these choices would affect working capital 
A)  Sale of long-term investments for cash at a loss 
B)  Transfer of a long-term investment for cash 
C)  Issuance of a long-term note in exchange for cash 
D)  Issuance of common shares of the corporation in exchange for noncurrent assets 
E)  All of these choices would affect working capital

Question 17

Book value per share is based upon all voting common and preferred shares.

Accepted Answer

A) True 
 B)False

Question 18

Information concerning XYZ's common shares is as follows:   What was the price-earnings ratio on common shares for 2014?

Accepted Answer

A)  2 to 1 
B)  2.67 to 1 
C)  3 to 1 
D)  4 to 1 
E)  None of these choices are correct. 
A)  2 to 1 
B)  2.67 to 1 
C)  3 to 1 
D)  4 to 1 
E)  None of these choices are correct.

Question 19

Which of the following analytical techniques uses statistical models in an attempt to predict a certain outcome?

Accepted Answer

A)  Cross-sectional comparison 
B)  Longitudinal comparison 
C)  Residual analysis 
D)  Multivariate ratio analysis 
A)  Cross-sectional comparison 
B)  Longitudinal comparison 
C)  Residual analysis 
D)  Multivariate ratio analysis

Question 20

ABC's net accounts receivable were $1,000 at December 31,2013 and $1,200 at December 31,2014.Net cash sales for 2014 were $400.The accounts receivable turnover for 2014 was 5.0.What were ABC's total net sales for 2014?

Accepted Answer

A)  $5,900 
B)  $6,000 
C)  $6,400 
D)  $11,000 
E)  None of these choices are correct 
A)  $5,900 
B)  $6,000 
C)  $6,400 
D)  $11,000 
E)  None of these choices are correct

One of the most important aspects of analysis of financial statements is the wording of the auditors' report.

Common-size analysis is a(n):

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: Calculate the balance sheet item Long-Term Debt

In calculating the book value per common share,total owners equity must be allocated to the respective common and preferred.

Published financial statements are always the best source of timely information on practically all financial items relevant to investors and creditors.

You are given the following information about KER Corp.: Required: Calculate KER's quick ratio.

You are given the following information about KER Corp.: Required: Calculate KER's current ratio.

Which of the following transactions would increase a company's positive current ratio?

A company may decide not to follow GAAP if it does not present them in a favourable position.

It is important for the user to understand the financial statements in order to make an informed decision.A user must generally do all of the following except:

A company issuing financial statements would most prefer to receive an auditor's opinion that is:

Profit margin on sales is very relevant for purposes of comparison,both between periods and between similar companies.

All companies are required to have audits.

Return on investment (of a corporation)is affected by the market price of its shares.

Information about the significant accounting policies of an entity is not necessary because GAAP prescribes uniform accounting treatment of all items,and it is widely understood.

The amount of working capital would not be affected by which of the following transactions?

Book value per share is based upon all voting common and preferred shares.

Information concerning XYZ's common shares is as follows: What was the price-earnings ratio on common shares for 2014?

Which of the following analytical techniques uses statistical models in an attempt to predict a certain outcome?

ABC's net accounts receivable were $1,000 at December 31,2013 and $1,200 at December 31,2014.Net cash sales for 2014 were $400.The accounts receivable turnover for 2014 was 5.0.What were ABC's total net sales for 2014?

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

One of the most important aspects of analysis of financial statements is the wording of the auditors' report.

Common-size analysis is a(n):

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: Calculate the balance sheet item Long-Term Debt

In calculating the book value per common share,total owners equity must be allocated to the respective common and preferred.

Published financial statements are always the best source of timely information on practically all financial items relevant to investors and creditors.

You are given the following information about KER Corp.: Required: Calculate KER's quick ratio.

You are given the following information about KER Corp.: Required: Calculate KER's current ratio.

Which of the following transactions would increase a company's positive current ratio?

A company may decide not to follow GAAP if it does not present them in a favourable position.

It is important for the user to understand the financial statements in order to make an informed decision.A user must generally do all of the following except:

A company issuing financial statements would most prefer to receive an auditor's opinion that is:

Profit margin on sales is very relevant for purposes of comparison,both between periods and between similar companies.

All companies are required to have audits.

Return on investment (of a corporation)is affected by the market price of its shares.

Information about the significant accounting policies of an entity is not necessary because GAAP prescribes uniform accounting treatment of all items,and it is widely understood.

The amount of working capital would not be affected by which of the following transactions?

Book value per share is based upon all voting common and preferred shares.

Information concerning XYZ's common shares is as follows: What was the price-earnings ratio on common shares for 2014?

Which of the following analytical techniques uses statistical models in an attempt to predict a certain outcome?

ABC's net accounts receivable were $1,000 at December 31,2013 and $1,200 at December 31,2014.Net cash sales for 2014 were $400.The accounts receivable turnover for 2014 was 5.0.What were ABC's total net sales for 2014?

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