Question 1

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

Accepted Answer

A) Inventory turnover of 9.17 times 
B) Current ratio of 1.06 
C) A 26.00% increase in current assets 
D) Current assets as 40.60% of total assets 
A) Inventory turnover of 9.17 times 
B) Current ratio of 1.06 
C) A 26.00% increase in current assets 
D) Current assets as 40.60% of total assets

Question 2

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

Accepted Answer

A) There was a 5.62% decrease from prior to current year. 
B) There was a 5.95% increase from prior to current year. 
C) The current ratio is 1.06. 
D) Selling/general expenses are 8.08% of net sales revenue. 
A) There was a 5.62% decrease from prior to current year. 
B) There was a 5.95% increase from prior to current year. 
C) The current ratio is 1.06. 
D) Selling/general expenses are 8.08% of net sales revenue.

Question 3

The formula to compute the acid-test ratio is

Accepted Answer

A) (cash + short-term investments + net current receivables)/current assets. 
B) (cash + short-term investments + net current receivables)/current liabilities. 
C) current liabilities/current assets. 
D) currents assets/current liabilities. 
A) (cash + short-term investments + net current receivables)/current assets. 
B) (cash + short-term investments + net current receivables)/current liabilities. 
C) current liabilities/current assets. 
D) currents assets/current liabilities.

Question 4

To follow is selected information about The Boston Company for the current year and prior year.
 
What is the current year's net income percentage (as would be found on a vertical analysis of the income statement for the current year)?

Accepted Answer

A) 8.60% 
B) 9.80% 
C) 9.00% 
D) 108.60% 
A) 8.60% 
B) 9.80% 
C) 9.00% 
D) 108.60%

Question 5

Comparing the horizontal analysis of McDonald's financial statements to the horizontal analysis of Burger King's financial statements in percentages of increase or decrease from 2010 to 2011 would be

Accepted Answer

A) vertical analysis. 
B) benchmarking. 
C) ratio analysis. 
D) horizontal analysis. 
A) vertical analysis. 
B) benchmarking. 
C) ratio analysis. 
D) horizontal analysis.

Question 6

The following information relates to Woolf Unlimited for the past two years.
 
What is the rate of return on total assets for the current year?

Accepted Answer

A) 0.10 
B) 0.13 
C) 0.14 
D) 0.78 
A) 0.10 
B) 0.13 
C) 0.14 
D) 0.78

Question 7

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

Accepted Answer

A) 13.33 
B) 1.75 
C) 13.00 
D) 10.00 
A) 13.33 
B) 1.75 
C) 13.00 
D) 10.00

Question 8

A company reported the following amounts of net income:
 
Which of the following is the percentage change from Year 1 to Year 2?

Accepted Answer

A) 150.00% 
B) 110.00% 
C) 40.00% 
D) 50.00% 
A) 150.00% 
B) 110.00% 
C) 40.00% 
D) 50.00%

Question 9

The following information relates to Woolf Unlimited for the past two years.
 
What is days' sales in receivables for the current year?

Accepted Answer

A) 56.78 days 
B) 69.20 days 
C) 43.08 days 
D) 10.00 days 
A) 56.78 days 
B) 69.20 days 
C) 43.08 days 
D) 10.00 days

Question 10

Taylor Company reported the following information for the current year:
 
What would a vertical analysis report with respect to current year income tax expense?

Accepted Answer

A) A decrease of $24,768 
B) A decrease of 144.80% from prior to current year 
C) Income tax expense is 2.00% of net sales revenue 
D) A decrease of $4,344 
A) A decrease of $24,768 
B) A decrease of 144.80% from prior to current year 
C) Income tax expense is 2.00% of net sales revenue 
D) A decrease of $4,344

Question 11

Taylor Company reported the following information for the current year:
 
What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?

Accepted Answer

A) COGS was 60.00% of net sales revenue 
B) A 8.20% decrease from prior to current year 
C) An increase of $19,680 from prior to current year 
D) An increase of $460,320 from prior to current year 
A) COGS was 60.00% of net sales revenue 
B) A 8.20% decrease from prior to current year 
C) An increase of $19,680 from prior to current year 
D) An increase of $460,320 from prior to current year

Question 12

Which of the following is the formula for computing the rate of return on total assets?

Accepted Answer

A) (Net income - preferred dividends)/number of shares of outstanding common stock 
B) Net income/net sales 
C) (Net income + interest expense)/average total assets 
D) (Net income - preferred dividends)/average common stockholders' equity 
A) (Net income - preferred dividends)/number of shares of outstanding common stock 
B) Net income/net sales 
C) (Net income + interest expense)/average total assets 
D) (Net income - preferred dividends)/average common stockholders' equity

Question 13

The current ratio is the most widely used ratio to measure a company's ability to pay current liabilities.

Accepted Answer

A) True 
 B)False

Question 14

The following information relates to Woolf Unlimited for the past two years.
 
What is the acid-test ratio for the current year?

Accepted Answer

A) 0.52 
B) 0.75 
C) 0.78 
D) 2.30 
A) 0.52 
B) 0.75 
C) 0.78 
D) 2.30

Question 15

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 current ratio for the current year?

Accepted Answer

A) 1.27 
B) 2.55 
C) 0.79 
D) 0.35 
A) 1.27 
B) 2.55 
C) 0.79 
D) 0.35

Question 16

The Nichols Corporation data for the current year:
 
What would a horizontal analysis report with respect to net income before income tax expense and net income?

Accepted Answer

A) Both net income before tax expense and net income were 11.26% of net sales revenue. 
B) Both net income before income tax expense and net income increased by $128,400. 
C) The current ratio is 1:06. 
D) There was an increase in both net income before income tax expense and net income of 14.00%. 
A) Both net income before tax expense and net income were 11.26% of net sales revenue. 
B) Both net income before income tax expense and net income increased by $128,400. 
C) The current ratio is 1:06. 
D) There was an increase in both net income before income tax expense and net income of 14.00%.

Question 17

Rate of return on net sales is a measure of a company's profitability.

Accepted Answer

A) True 
 B)False

Question 18

In performing a vertical analysis of a balance sheet,which of the following is generally used as the base amount?

Accepted Answer

A) Total liabilities 
B) Net assets 
C) Total assets 
D) Total stockholder's equity 
A) Total liabilities 
B) Net assets 
C) Total assets 
D) Total stockholder's equity

Question 19

Investors and creditors generally evaluate a company by using a single year's data.

Accepted Answer

A) True 
 B)False

Question 20

The data provided by the horizontal or vertical analysis of the financial statements can be used in benchmarking.

Accepted Answer

A) True 
 B)False

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

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

The formula to compute the acid-test ratio is

To follow is selected information about The Boston Company for the current year and prior year. What is the current year's net income percentage (as would be found on a vertical analysis of the income statement for the current year)?

Comparing the horizontal analysis of McDonald's financial statements to the horizontal analysis of Burger King's financial statements in percentages of increase or decrease from 2010 to 2011 would be

The following information relates to Woolf Unlimited for the past two years. What is the rate of return on total assets for the current year?

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

A company reported the following amounts of net income: Which of the following is the percentage change from Year 1 to Year 2?

The following information relates to Woolf Unlimited for the past two years. What is days' sales in receivables for the current year?

Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to current year income tax expense?

Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?

Which of the following is the formula for computing the rate of return on total assets?

The current ratio is the most widely used ratio to measure a company's ability to pay current liabilities.

The following information relates to Woolf Unlimited for the past two years. What is the acid-test ratio for the current year?

The Nichols Corporation data for the current year: What would a horizontal analysis report with respect to net income before income tax expense and net income?

Rate of return on net sales is a measure of a company's profitability.

In performing a vertical analysis of a balance sheet,which of the following is generally used as the base amount?

Investors and creditors generally evaluate a company by using a single year's data.

The data provided by the horizontal or vertical analysis of the financial statements can be used in benchmarking.

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 current assets?

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

The formula to compute the acid-test ratio is

To follow is selected information about The Boston Company for the current year and prior year. What is the current year's net income percentage (as would be found on a vertical analysis of the income statement for the current year)?

Comparing the horizontal analysis of McDonald's financial statements to the horizontal analysis of Burger King's financial statements in percentages of increase or decrease from 2010 to 2011 would be

The following information relates to Woolf Unlimited for the past two years. What is the rate of return on total assets for the current year?

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

A company reported the following amounts of net income: Which of the following is the percentage change from Year 1 to Year 2?

The following information relates to Woolf Unlimited for the past two years. What is days' sales in receivables for the current year?

Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to current year income tax expense?

Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?

Which of the following is the formula for computing the rate of return on total assets?

The current ratio is the most widely used ratio to measure a company's ability to pay current liabilities.

The following information relates to Woolf Unlimited for the past two years. What is the acid-test ratio for the current year?

The Nichols Corporation data for the current year: What would a horizontal analysis report with respect to net income before income tax expense and net income?

Rate of return on net sales is a measure of a company's profitability.

In performing a vertical analysis of a balance sheet,which of the following is generally used as the base amount?

Investors and creditors generally evaluate a company by using a single year's data.

The data provided by the horizontal or vertical analysis of the financial statements can be used in benchmarking.

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