Question 1

Industry standards for financial statement analysis:

Accepted Answer

A)  Are based on a single competitor's financial performance. 
B)  Are set by the government. 
C)  Are available for the financial performance and condition of the company's industry. 
D)  Are based on rules of thumb. 
E)  Compare a company's income with its prior year's income. 
A)  Are based on a single competitor's financial performance. 
B)  Are set by the government. 
C)  Are available for the financial performance and condition of the company's industry. 
D)  Are based on rules of thumb. 
E)  Compare a company's income with its prior year's income.

Question 2

The ability to generate positive market expectations is called:

Accepted Answer

A)  Liquidity and efficiency. 
B)  Liquidity and solvency. 
C)  Profitability. 
D)  Market prospects. 
E)  Creditworthiness. 
A)  Liquidity and efficiency. 
B)  Liquidity and solvency. 
C)  Profitability. 
D)  Market prospects. 
E)  Creditworthiness.

Question 3

Carducci Corporation reported Net sales of $3.6 million and beginning Total assets of $0.9 million and ending Total assets of $1.3 million. The average Total asset amount is:

Accepted Answer

A)  $2.3 million. 
B)  $2.7 million. 
C)  $0.25 million. 
D)  $0.36 million. 
E)  $1.1 million. 
A)  $2.3 million. 
B)  $2.7 million. 
C)  $0.25 million. 
D)  $0.36 million. 
E)  $1.1 million.

Question 4

General standards of comparisons, developed from experience, include the 2:1 level for the current ratio and 1:1 level for the acid-test ratio.

Accepted Answer

A) True 
 B)False

Question 5

All of the following are true of a financial statement analysis report, except:

Accepted Answer

A)  Contains ambiguities and qualifications. 
B)  Forces preparers to organize their reasoning and to verify the logic of analysis. 
C)  Serves as a method of communication to users. 
D)  Helps users and preparers to refine conclusions based on evidence from key building blocks. 
E)  Enables readers to see the process and rationale of analysis. 
A)  Contains ambiguities and qualifications. 
B)  Forces preparers to organize their reasoning and to verify the logic of analysis. 
C)  Serves as a method of communication to users. 
D)  Helps users and preparers to refine conclusions based on evidence from key building blocks. 
E)  Enables readers to see the process and rationale of analysis.

Question 6

The comparison of a company's financial condition and performance across time is known as ________.

Accepted Answer

The answer of The comparison of a company's financial condition...

Question 7

The evaluation of company performance and financial condition focuses solely on past performance.

Accepted Answer

A) True 
 B)False

Question 8

Calculate the percent increase or decrease for each of the following financial statement items:
 $$\begin{array} { | l | r | r | r | } 
\hline & \text { Year } 2 & \text { Year 1 } \
\hline \text { Cash } & \$ 37,500 & \$ 30,000 \
\hline \text { Accounts receivable } & 63,000 & 52,500 \
\hline \text { Inventory } & 67,500 & 90,000 \
\hline \text { Accounts payable } & 35,100 & 27,000 \
\text { Sales } & 187,500 & 150,000 \
\hline \text { Equipment } & 165,000 & 125,000 \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | l | } 
\hlin

Question 9

Vertical analysis is the comparison of a company's financial condition and performance across time.

Accepted Answer

A) True 
 B)False

Question 10

Horizontal analysis is used to reveal patterns in data covering two or more successive periods.

Accepted Answer

A) True 
 B)False

Question 11

The return on common stockholder's equity measures a company's success in earning net income for its owners.

Accepted Answer

A) True 
 B)False

Question 12

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

Accepted Answer

A) True 
 B)False

Question 13

A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals 7.85%.

Accepted Answer

A) True 
 B)False

Question 14

When no value is in the base period, no percent change is computable.

Accepted Answer

A) True 
 B)False

Question 15

Net sales divided by average total assets is the:

Accepted Answer

A)  Profit margin. 
B)  Total asset turnover. 
C)  Current ratio. 
D)  Sales return ratio. 
E)  Return on total assets. 
A)  Profit margin. 
B)  Total asset turnover. 
C)  Current ratio. 
D)  Sales return ratio. 
E)  Return on total assets.

Question 16

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 common size percentages for operating expenses using Net sales as the base. $$\begin{array} { | l | r | r |} 
\hline &  { 2017 } &{ \mathbf { 2 0 1 6 } } \
\hline \text { Net sales } & \$ 276,200 & \$ 231,400 \
\hline \text { Cost of goods sold } & 151,900 & 129,590 \
\hline \text { Operating expenses } & 55,240 & 53,240 \
\hline \text { Net earnings } & 27,82 \mathrm {~d} & 19,820 \
\hline
\end{array}$$

Accepted Answer

A)  36.4% for 2017 and 41.1% for 2016. 
B)  55.0% for 2017 and 56.0% for 2016. 
C)  23.9% for 2017 and 23.0% for 2016. 
D)  103.8% for 2017 and 100.0% for 2016. 
E)  20.0% for 2017 and 23.0% for 2016. 
A)  36.4% for 2017 and 41.1% for 2016. 
B)  55.0% for 2017 and 56.0% for 2016. 
C)  23.9% for 2017 and 23.0% for 2016. 
D)  103.8% for 2017 and 100.0% for 2016. 
E)  20.0% for 2017 and 23.0% for 2016.

Question 17

Financial statement analysis involves all of the following except:

Accepted Answer

A)  The application of analytical tools to general-purpose financial statements and related data for making business decisions. 
B)  Transforming accounting data into useful information for decision-making. 
C)  Helping users to make better decisions. 
D)  Helping to reduce uncertainty in decision-making. 
E)  Assuring that the company will be more profitable in the future. 
A)  The application of analytical tools to general-purpose financial statements and related data for making business decisions. 
B)  Transforming accounting data into useful information for decision-making. 
C)  Helping users to make better decisions. 
D)  Helping to reduce uncertainty in decision-making. 
E)  Assuring that the company will be more profitable in the future.

Question 18

A corporation reported cash of $27,000 and total assets of $461,000 on its balance sheet. Its common-size percent for cash equals:

Accepted Answer

A)  17.1%. 
B)  58.6%. 
C)  100%. 
D)  5.86%. 
E)  1707%. 
A)  17.1%. 
B)  58.6%. 
C)  100%. 
D)  5.86%. 
E)  1707%.

Question 19

The evaluation of company performance and financial condition includes evaluation of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

Accepted Answer

A) True 
 B)False

Question 20

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750. The Inventory turnover ratio is:

Accepted Answer

A)  0.5 times. 
B)  418 times. 
C)  20 times. 
D)  56 times. 
E)  19 times. 
A)  0.5 times. 
B)  418 times. 
C)  20 times. 
D)  56 times. 
E)  19 times.

Industry standards for financial statement analysis:

The ability to generate positive market expectations is called:

Carducci Corporation reported Net sales of $3.6 million and beginning Total assets of $0.9 million and ending Total assets of $1.3 million. The average Total asset amount is:

General standards of comparisons, developed from experience, include the 2:1 level for the current ratio and 1:1 level for the acid-test ratio.

All of the following are true of a financial statement analysis report, except:

The comparison of a company's financial condition and performance across time is known as ________.

The evaluation of company performance and financial condition focuses solely on past performance.

Calculate the percent increase or decrease for each of the following financial statement items: Year 2 Year 1 Cash \ 37,500 \ 30,000 Accounts receivable 63,000 52,500 Inventory 67,500 90,000 Accounts payable 35,100 27,000 Sales 187,500 150,000 Equipment 165,000 125,000

Vertical analysis is the comparison of a company's financial condition and performance across time.

Horizontal analysis is used to reveal patterns in data covering two or more successive periods.

The return on common stockholder's equity measures a company's success in earning net income for its owners.

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals 7.85%.

When no value is in the base period, no percent change is computable.

Net sales divided by average total assets is the:

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 common size percentages for operating expenses using Net sales as the base. 2017 Net sales \ 276,200 \ 231,400 Cost of goods sold 151,900 129,590 Operating expenses 55,240 53,240 Net earnings 27,82 19,820

Financial statement analysis involves all of the following except:

A corporation reported cash of $27,000 and total assets of $461,000 on its balance sheet. Its common-size percent for cash equals:

The evaluation of company performance and financial condition includes evaluation of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750. The Inventory turnover ratio is:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity Based Costing and Analysis

Cost Behavior Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Time Value of Money

Analyzing for Business Transactions

Partnership Accounting

Filters

Exam 13: Analysis of Financial Statements

Industry standards for financial statement analysis:

The ability to generate positive market expectations is called:

Carducci Corporation reported Net sales of $3.6 million and beginning Total assets of $0.9 million and ending Total assets of $1.3 million. The average Total asset amount is:

General standards of comparisons, developed from experience, include the 2:1 level for the current ratio and 1:1 level for the acid-test ratio.

All of the following are true of a financial statement analysis report, except:

The comparison of a company's financial condition and performance across time is known as ________.

The evaluation of company performance and financial condition focuses solely on past performance.

Calculate the percent increase or decrease for each of the following financial statement items: Year 2 Year 1 Cash \ 37,500 \ 30,000 Accounts receivable 63,000 52,500 Inventory 67,500 90,000 Accounts payable 35,100 27,000 Sales 187,500 150,000 Equipment 165,000 125,000

Vertical analysis is the comparison of a company's financial condition and performance across time.

Horizontal analysis is used to reveal patterns in data covering two or more successive periods.

The return on common stockholder's equity measures a company's success in earning net income for its owners.

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals 7.85%.

When no value is in the base period, no percent change is computable.

Net sales divided by average total assets is the:

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 common size percentages for operating expenses using Net sales as the base. 2017 Net sales \ 276,200 \ 231,400 Cost of goods sold 151,900 129,590 Operating expenses 55,240 53,240 Net earnings 27,82 19,820

Financial statement analysis involves all of the following except:

A corporation reported cash of $27,000 and total assets of $461,000 on its balance sheet. Its common-size percent for cash equals:

The evaluation of company performance and financial condition includes evaluation of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750. The Inventory turnover ratio is:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity Based Costing and Analysis

Cost Behavior Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Time Value of Money

Analyzing for Business Transactions

Partnership Accounting

Filters