Question 1

The Nichols Corporation data for the current year:
 
What would a horizontal analysis report with respect to long-term liabilities?

Accepted Answer

A) Long-term liabilities increased by $6,000. 
B) Long-term liabilities decreased by 5.92%. 
C) Long-term liabilities increased by 6.21%. 
D) Long-term liabilities decreased by $1,500. 
A) Long-term liabilities increased by $6,000. 
B) Long-term liabilities decreased by 5.92%. 
C) Long-term liabilities increased by 6.21%. 
D) Long-term liabilities decreased by $1,500.

Question 2

A table that lists items of a balance sheet in dollars and percentages for two companies would be

Accepted Answer

A) used for vertical analysis. 
B) a common-size balance sheet. 
C) used for benchmarking. 
D) used for horizontal analysis. 
A) used for vertical analysis. 
B) a common-size balance sheet. 
C) used for benchmarking. 
D) used for horizontal analysis.

Question 3

The Stemple Corporation data for the current year:
 
What would a horizontal analysis report with respect to selling/general expenses show?

Accepted Answer

A) A 13.64% increase 
B) Selling/general expenses as 7.39% of net sales revenue 
C) A current ratio of 1.24 
D) A 12% decrease 
A) A 13.64% increase 
B) Selling/general expenses as 7.39% of net sales revenue 
C) A current ratio of 1.24 
D) A 12% decrease

Question 4

The Bedford 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 $30,000 of the current year's current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $45,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the acid-test ratio for the current year?

Accepted Answer

A) 0.53 
B) 1.98 
C) 8.46 
D) 1.46 
A) 0.53 
B) 1.98 
C) 8.46 
D) 1.46

Question 5

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

Accepted Answer

A) There is a sales return of $10.23. 
B) There was an increase of 18.00% in net sales revenue. 
C) The cost of goods sold is 77.29% of net sales revenue. 
D) There is an accounts receivable turnover of 11.26 times. 
A) There is a sales return of $10.23. 
B) There was an increase of 18.00% in net sales revenue. 
C) The cost of goods sold is 77.29% of net sales revenue. 
D) There is an accounts receivable turnover of 11.26 times.

Question 6

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

Accepted Answer

A) 13.33. 
B) 1.97. 
C) 9.60. 
D) 13.50. 
A) 13.33. 
B) 1.97. 
C) 9.60. 
D) 13.50.

Question 7

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

Accepted Answer

A) 2.30 times 
B) 0.78 times 
C) 13.00 times 
D) 2.20 times 
A) 2.30 times 
B) 0.78 times 
C) 13.00 times 
D) 2.20 times

Question 8

The formula for computing book value per share of common stock is

Accepted Answer

A) market price per share of common stock/earning per share. 
B) annual dividend per share of common stock/market price per share of common stock. 
C) (net income - preferred dividends)/number of shares of common stock outstanding. 
D) (total stockholders' equity - preferred equity)/number of shares of common stock outstanding. 
A) market price per share of common stock/earning per share. 
B) annual dividend per share of common stock/market price per share of common stock. 
C) (net income - preferred dividends)/number of shares of common stock outstanding. 
D) (total stockholders' equity - preferred equity)/number of shares of common stock outstanding.

Question 9

A common size statement reports only percentages.

Accepted Answer

A) True 
 B)False

Question 10

The managerial accountant at Managerial Funding Resources reported in 2014 its earnings per share were $6.20 and the market price per share of its common stock is $75.In 2013,the managerial accountant reported $3.10 earnings per share and the market price was $40 per share.
Compute the price/earnings ratio at Managerial Funding Resources and discuss why the managerial accountant is interested in the price/earnings ratio.

Accepted Answer

The price/earnings ratio is 12.09 in 201

Question 11

Net income is used as the base for vertical analysis percentages on the income statement.

Accepted Answer

A) True 
 B)False

Question 12

Selected information about The Staccato Company for the current year and prior year is given below.
 
The current year's selling and general expenses percentage (as would be found on a vertical analysis of the income statement for the current year)is

Accepted Answer

A) 22.00%. 
B) 23.96%. 
C) 152.47%. 
D) 14.43%. 
A) 22.00%. 
B) 23.96%. 
C) 152.47%. 
D) 14.43%.

Question 13

The managerial accountant at the Holiday Wreath Shoppe is required to determine the relationship between net income and common stockholder's equity.The goal of the managerial accountant is to determine how much income is earned at the Holiday Wreath Shoppe for each $1 invested by the common shareholders.The managerial accountant reported that the rate of return on assets is 9.5%.The managerial accountant reported the following information:   
Calculate the rate of return on common stockholder's equity in 2014.Discuss the difference in the rate of return on assets at the Wreath Factory compared to the rate of return on its rate of return on common stockholder's equity.

Accepted Answer

The rate of return on common stockholder

Question 14

The ________ ratio measures the ability of a company to pay all current liabilities if they came due immediately.

Accepted Answer

A) inventory turnover 
B) current 
C) day's sales in receivables 
D) acid-test 
A) inventory turnover 
B) current 
C) day's sales in receivables 
D) acid-test

Question 15

The Bedford 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 $30,000 of the current year's current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $45,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the current ratio for the current year?

Accepted Answer

A) 0.38 
B) 0.53 
C) 1.98 
D) 0.50 
A) 0.38 
B) 0.53 
C) 1.98 
D) 0.50

Question 16

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 book value per share of common stock on the last day of the current year?

Accepted Answer

A) $4.33 
B) $6.50 
C) $25.00 
D) $42.00 
A) $4.33 
B) $6.50 
C) $25.00 
D) $42.00

Question 17

The A/R turnover ratio is the ratio of net credit sales to average net accounts receivable.

Accepted Answer

A) True 
 B)False

Question 18

Generally,using more than one year of data to analyze company performance is desirable.

Accepted Answer

A) True 
 B)False

Question 19

Vertical analysis is the analysis of a financial statement that reveals the relationship of each statement item to a specified base.

Accepted Answer

A) True 
 B)False

Question 20

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& Pa

The Nichols Corporation data for the current year: What would a horizontal analysis report with respect to long-term liabilities?

A table that lists items of a balance sheet in dollars and percentages for two companies would be

The Stemple Corporation data for the current year: What would a horizontal analysis report with respect to selling/general expenses show?

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

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

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

The formula for computing book value per share of common stock is

A common size statement reports only percentages.

Net income is used as the base for vertical analysis percentages on the income statement.

Selected information about The Staccato Company for the current year and prior year is given below. The current year's selling and general expenses percentage (as would be found on a vertical analysis of the income statement for the current year)is

The ________ ratio measures the ability of a company to pay all current liabilities if they came due immediately.

The A/R turnover ratio is the ratio of net credit sales to average net accounts receivable.

Generally,using more than one year of data to analyze company performance is desirable.

Vertical analysis is the analysis of a financial statement that reveals the relationship of each statement item to a specified base.

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

The Nichols Corporation data for the current year: What would a horizontal analysis report with respect to long-term liabilities?

A table that lists items of a balance sheet in dollars and percentages for two companies would be

The Stemple Corporation data for the current year: What would a horizontal analysis report with respect to selling/general expenses show?

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

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

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

The formula for computing book value per share of common stock is

A common size statement reports only percentages.

Net income is used as the base for vertical analysis percentages on the income statement.

Selected information about The Staccato Company for the current year and prior year is given below. The current year's selling and general expenses percentage (as would be found on a vertical analysis of the income statement for the current year)is

The ________ ratio measures the ability of a company to pay all current liabilities if they came due immediately.

The A/R turnover ratio is the ratio of net credit sales to average net accounts receivable.

Generally,using more than one year of data to analyze company performance is desirable.

Vertical analysis is the analysis of a financial statement that reveals the relationship of each statement item to a specified base.

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