Question 1

In a common-size Income Statement,selling expenses are 55%.This means that they are 55% of:

Accepted Answer

A) net income. 
B) net sales. 
C) gross profit. 
D) net profit. 
A) net income. 
B) net sales. 
C) gross profit. 
D) net profit. B

Question 2

The lower the interest coverage ratio,the more likely:

Accepted Answer

A) a default in payment will occur. 
B) a business needs to borrow money. 
C) a business will suffer a loss. 
D) interest payments can be made. 
A) a default in payment will occur. 
B) a business needs to borrow money. 
C) a business will suffer a loss. 
D) interest payments can be made. A

Question 3

If management wishes to evaluate the delinquency of charge customers,they could use the:

Accepted Answer

A) rate of return on total assets. 
B) rate of return on equity. 
C) Accounts Receivable turnover. 
D) quick ratio. 
A) rate of return on total assets. 
B) rate of return on equity. 
C) Accounts Receivable turnover. 
D) quick ratio. C

Question 4

Franklin Fisheries had extraordinary losses of $150,000.If their corporate tax rate is 30%,at what amount will the losses be shown on the Income Statement?

Accepted Answer

A) $150,000 
B) $105,000 
C) $45,000 
D) Not enough information is given to answer the question. 
A) $150,000 
B) $105,000 
C) $45,000 
D) Not enough information is given to answer the question.

Question 5

The last section of an Income Statement report is:

Accepted Answer

A) extraordinary items. 
B) discontinued operations. 
C) continuing operations. 
D) income tax expense. 
A) extraordinary items. 
B) discontinued operations. 
C) continuing operations. 
D) income tax expense.

Question 6

With a beginning Accounts Receivable balance of $80,000;an ending Accounts Receivable balance of $120,000;and Sales of $900,000,the Accounts Receivable turnover is:

Accepted Answer

A) 9)00. 
B) 8)89. 
C) 22.22. 
D) 13.33. 
A) 9)00. 
B) 8)89. 
C) 22.22. 
D) 13.33.

Question 7

A company's business strategy describes:

Accepted Answer

A) what the business does. 
B) how the business is affected by the overall economy. 
C) who the business sells to. 
D) how the business creates a competitive advantage. 
A) what the business does. 
B) how the business is affected by the overall economy. 
C) who the business sells to. 
D) how the business creates a competitive advantage.

Question 8

The base amounts for a vertical analysis are net income and total equity.

Accepted Answer

A) True 
 B)False

Question 9

For vertical analysis purposes,the base item on the Income Statement is:

Accepted Answer

A) net income. 
B) net sales. 
C) total expenses. 
D) gross profit. 
A) net income. 
B) net sales. 
C) total expenses. 
D) gross profit.

Question 10

In a vertical analysis,an item is selected as the base amount and all other items are computed as a percentage of the base amount.

Accepted Answer

A) True 
 B)False

Question 11

Financial statement analysis indicates only that a problem may exist and offers clues as to what the problem might be.

Accepted Answer

A) True 
 B)False

Question 12

Predictions about a company's future earnings can best be inferred from the:

Accepted Answer

A) earnings per share data. 
B) discontinued operations section. 
C) continuing operations section. 
D) extraordinary items section. 
A) earnings per share data. 
B) discontinued operations section. 
C) continuing operations section. 
D) extraordinary items section.

Question 13

On the Income Statement,extraordinary items are reported:

Accepted Answer

A) immediately after the continuing operations section. 
B) immediately before the discontinued operations section. 
C) net of income tax or net of income tax savings. 
D) before the operating income section. 
A) immediately after the continuing operations section. 
B) immediately before the discontinued operations section. 
C) net of income tax or net of income tax savings. 
D) before the operating income section.

Question 14

The return on assets measures the relationship between sales and average total assets.

Accepted Answer

A) True 
 B)False

Question 15

If cash is $4,450 in 2014 and $3,670 in 2013,what is the percent increase or decrease from 2013 to 2014?

Accepted Answer

A) +2.125. 
B) +21.250. 
C) -1.753. 
D) +17.530. 
A) +2.125. 
B) +21.250. 
C) -1.753. 
D) +17.530.

Question 16

What was the percentage of change in Accounts Receivable if the balance was $80,000 in 2013 and $60,000 in 2014?

Accepted Answer

A) -25.00%. 
B) +25.00%. 
C) -33.33%. 
D) +33.33%. 
A) -25.00%. 
B) +25.00%. 
C) -33.33%. 
D) +33.33%.

Question 17

The 2013 and 2014 balance sheets for Shadow Industries showed Cash of $8,000 and $9,500 respectively,Accounts Receivable of $14,000 and $16,000,respectively,Inventory of $11,000 and $8,000,respectively,and Accounts Payable of $5,000 and $7,000,respectively.Its 2014 Income Statement showed Net Sales of $108,000,Cost of Goods Sold of $62,000,and Net Income of $27,000.The cash conversion cycle for 2014 was (round calculations to two decimal places):

Accepted Answer

A) 141.94 days. 
B) 40.56 days. 
C) 30.08 days. 
D) 71.30 days. 
A) 141.94 days. 
B) 40.56 days. 
C) 30.08 days. 
D) 71.30 days.

Question 18

Illusions,Inc.has net sales of $980,000,net income of $72,000,average current assets of $42,000,average fixed assets of $168,000,and average total assets of $210,000.Illusions,Inc.'s total asset turnover ratio is:

Accepted Answer

A) 0)21. 
B) 4)67. 
C) 5)83. 
D) 23.33. 
A) 0)21. 
B) 4)67. 
C) 5)83. 
D) 23.33.

Question 19

A business's economic environment describes how a business:

Accepted Answer

A) competes for critical resources. 
B) is affected by the overall economy. 
C) uses its business model to create a competitive advantage. 
D) makes its product. 
A) competes for critical resources. 
B) is affected by the overall economy. 
C) uses its business model to create a competitive advantage. 
D) makes its product.

Question 20

The net working capital for a company with current assets of $70,000,quick assets of $30,000,total assets of $150,000,current liabilities of $50,000 and net sales of $80,000 would be:

Accepted Answer

A) $100,000. 
B) $50,000. 
C) $30,000. 
D) $20,000. 
A) $100,000. 
B) $50,000. 
C) $30,000. 
D) $20,000.

In a common-size Income Statement,selling expenses are 55%.This means that they are 55% of:

The lower the interest coverage ratio,the more likely:

If management wishes to evaluate the delinquency of charge customers,they could use the:

Franklin Fisheries had extraordinary losses of $150,000.If their corporate tax rate is 30%,at what amount will the losses be shown on the Income Statement?

The last section of an Income Statement report is:

With a beginning Accounts Receivable balance of $80,000;an ending Accounts Receivable balance of $120,000;and Sales of $900,000,the Accounts Receivable turnover is:

A company's business strategy describes:

The base amounts for a vertical analysis are net income and total equity.

For vertical analysis purposes,the base item on the Income Statement is:

In a vertical analysis,an item is selected as the base amount and all other items are computed as a percentage of the base amount.

Financial statement analysis indicates only that a problem may exist and offers clues as to what the problem might be.

Predictions about a company's future earnings can best be inferred from the:

On the Income Statement,extraordinary items are reported:

The return on assets measures the relationship between sales and average total assets.

If cash is $4,450 in 2014 and $3,670 in 2013,what is the percent increase or decrease from 2013 to 2014?

What was the percentage of change in Accounts Receivable if the balance was $80,000 in 2013 and $60,000 in 2014?

Illusions,Inc.has net sales of $980,000,net income of $72,000,average current assets of $42,000,average fixed assets of $168,000,and average total assets of $210,000.Illusions,Inc.'s total asset turnover ratio is:

A business's economic environment describes how a business:

The net working capital for a company with current assets of $70,000,quick assets of $30,000,total assets of $150,000,current liabilities of $50,000 and net sales of $80,000 would be:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

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Exam 12: Financial Statement Analysis

In a common-size Income Statement,selling expenses are 55%.This means that they are 55% of:

The lower the interest coverage ratio,the more likely:

If management wishes to evaluate the delinquency of charge customers,they could use the:

Franklin Fisheries had extraordinary losses of $150,000.If their corporate tax rate is 30%,at what amount will the losses be shown on the Income Statement?

The last section of an Income Statement report is:

With a beginning Accounts Receivable balance of $80,000;an ending Accounts Receivable balance of $120,000;and Sales of $900,000,the Accounts Receivable turnover is:

A company's business strategy describes:

The base amounts for a vertical analysis are net income and total equity.

For vertical analysis purposes,the base item on the Income Statement is:

In a vertical analysis,an item is selected as the base amount and all other items are computed as a percentage of the base amount.

Financial statement analysis indicates only that a problem may exist and offers clues as to what the problem might be.

Predictions about a company's future earnings can best be inferred from the:

On the Income Statement,extraordinary items are reported:

The return on assets measures the relationship between sales and average total assets.

If cash is $4,450 in 2014 and $3,670 in 2013,what is the percent increase or decrease from 2013 to 2014?

What was the percentage of change in Accounts Receivable if the balance was $80,000 in 2013 and $60,000 in 2014?

Illusions,Inc.has net sales of $980,000,net income of $72,000,average current assets of $42,000,average fixed assets of $168,000,and average total assets of $210,000.Illusions,Inc.'s total asset turnover ratio is:

A business's economic environment describes how a business:

The net working capital for a company with current assets of $70,000,quick assets of $30,000,total assets of $150,000,current liabilities of $50,000 and net sales of $80,000 would be:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Filters