Question 1

A trend percentage is computed by dividing the dollar amount of change by the base-year amount.

Accepted Answer

A) True 
 B)False

Question 2

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 rate of return on net sales for the current year?

Accepted Answer

A) 0.37 
B) 0.03 
C) 0.14 
D) 1.46 
A) 0.37 
B) 0.03 
C) 0.14 
D) 1.46

Question 3

In performing a vertical analysis of an income statement,which of the following is generally used as the base amount?

Accepted Answer

A) Net sales 
B) Total expenses 
C) Gross sales 
D) Gross profit 
A) Net sales 
B) Total expenses 
C) Gross sales 
D) Gross profit

Question 4

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 debt ratio for the current year?

Accepted Answer

A) 0.21 
B) 0.06 
C) 1.27 
D) 0.35 
A) 0.21 
B) 0.06 
C) 1.27 
D) 0.35

Question 5

To follow is selected information about The Boston Company for the current year and prior year.
 
What is 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)?

Accepted Answer

A) 25.05% 
B) 14.43% 
C) 159.40% 
D) 23.00% 
A) 25.05% 
B) 14.43% 
C) 159.40% 
D) 23.00%

Question 6

The following information relates to Truman Unlimited for the past two years.
 
The times-interest-earned ratio for the current year is

Accepted Answer

A) 13.5 times. 
B) 16.0 times. 
C) 2.0 times. 
D) 3.8 times. 
A) 13.5 times. 
B) 16.0 times. 
C) 2.0 times. 
D) 3.8 times.

Question 7

Days' sales in receivables is a measure of a company's ability to collect their accounts receivable.

Accepted Answer

A) True 
 B)False

Question 8

Vertical analysis would rarely be performed on which of the following?

Accepted Answer

A) Income statement 
B) Schedule of depreciation 
C) Balance sheet 
D) All of the above are common targets of vertical analysis. 
A) Income statement 
B) Schedule of depreciation 
C) Balance sheet 
D) All of the above are common targets of vertical analysis.

Question 9

The managerial accountant at Megaton Company reported no preferred dividends paid in 2013 and 2014;and,there were 20,000 shares of outstanding stock at the end of 2013 and 2014.The managerial accountant reported that net income in 2014 was $95,000 and the value of common stock at the end of the year was $28.85 per share.The managerial accountant reported that net income in 2013 was $65,000 and the value of common stock at the end of the year was $12.95 per share.
Compute the earnings per share (EPS)at Megaton Company in 2013 and in 2014.Did the EPS increase or decrease in 2014? Should a managerial accountant strive to achieve an increase in EPS or a decrease in EPS? What can a decrease in EPS indicate?

Accepted Answer

The EPS in 2014 was $4.75;and,the EPS in

Question 10

The McCumber Corporation data for the current year:
 
With respect to long-term liabilities,what would a horizontal analysis report?

Accepted Answer

A) Long-term liabilities decreased by 6.15%. 
B) Long-term liabilities increased by $8,000. 
C) Long-term liabilities increased by 6.15%. 
D) Long-term liabilities decreased by $1,800. 
A) Long-term liabilities decreased by 6.15%. 
B) Long-term liabilities increased by $8,000. 
C) Long-term liabilities increased by 6.15%. 
D) Long-term liabilities decreased by $1,800.

Question 11

Use the following information to do a horizontal analysis of Marcus Corporation's income statement for the current year and prior year:
 
What is the percentage change in net income?

Accepted Answer

A) 78.00% 
B) -22.00% 
C) 16.73% 
D) 35.59% 
A) 78.00% 
B) -22.00% 
C) 16.73% 
D) 35.59%

Question 12

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 rate of return on common stockholder's equity for the current year?

Accepted Answer

A) 32.00% 
B) 42.11% 
C) 6.00% 
D) 30.77% 
A) 32.00% 
B) 42.11% 
C) 6.00% 
D) 30.77%

Question 13

The following information relates to Truman Unlimited for the past two years.
 
The book value per share of common stock for the current year is

Accepted Answer

A) $52.77. 
B) $79.50. 
C) $13.50. 
D) $96.00. 
A) $52.77. 
B) $79.50. 
C) $13.50. 
D) $96.00.

Question 14

The formula used in vertical analysis of the balance sheet is: (each balance sheet line item/total assets)= vertical %.

Accepted Answer

A) True 
 B)False

Question 15

In comparing companies of different sizes,which of the following is most helpful?

Accepted Answer

A) Ratio analysis 
B) Using common-sized statements 
C) Neither ratio analysis nor common-sized statements 
D) Both ratio analysis and using common-sized statements 
A) Ratio analysis 
B) Using common-sized statements 
C) Neither ratio analysis nor common-sized statements 
D) Both ratio analysis and using common-sized statements

Question 16

The McCumber Corporation data for the current year:
 
With respect to net sales revenue,what would a horizontal analysis report?

Accepted Answer

A) There was an increase of 20.00% in net sales revenue. 
B) There is a sales return of $10.40. 
C) The cost of goods sold is 77.37% of net sales revenue. 
D) There is an accounts receivable turnover of 11.17 times. 
A) There was an increase of 20.00% in net sales revenue. 
B) There is a sales return of $10.40. 
C) The cost of goods sold is 77.37% of net sales revenue. 
D) There is an accounts receivable turnover of 11.17 times.

Question 17

In a horizontal analysis,the earlier period is the base period.

Accepted Answer

A) True 
 B)False

A trend percentage is computed by dividing the dollar amount of change by the base-year amount.

In performing a vertical analysis of an income statement,which of the following is generally used as the base amount?

To follow is selected information about The Boston Company for the current year and prior year. What is 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)?

The following information relates to Truman Unlimited for the past two years. The times-interest-earned ratio for the current year is

Days' sales in receivables is a measure of a company's ability to collect their accounts receivable.

Vertical analysis would rarely be performed on which of the following?

The McCumber Corporation data for the current year: With respect to long-term liabilities,what would a horizontal analysis report?

Use the following information to do a horizontal analysis of Marcus Corporation's income statement for the current year and prior year: What is the percentage change in net income?

The following information relates to Truman Unlimited for the past two years. The book value per share of common stock for the current year is

The formula used in vertical analysis of the balance sheet is: (each balance sheet line item/total assets)= vertical %.

In comparing companies of different sizes,which of the following is most helpful?

The McCumber Corporation data for the current year: With respect to net sales revenue,what would a horizontal analysis report?

In a horizontal analysis,the earlier period is the base period.

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

A trend percentage is computed by dividing the dollar amount of change by the base-year amount.

In performing a vertical analysis of an income statement,which of the following is generally used as the base amount?

To follow is selected information about The Boston Company for the current year and prior year. What is 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)?

The following information relates to Truman Unlimited for the past two years. The times-interest-earned ratio for the current year is

Days' sales in receivables is a measure of a company's ability to collect their accounts receivable.

Vertical analysis would rarely be performed on which of the following?

The McCumber Corporation data for the current year: With respect to long-term liabilities,what would a horizontal analysis report?

Use the following information to do a horizontal analysis of Marcus Corporation's income statement for the current year and prior year: What is the percentage change in net income?

The following information relates to Truman Unlimited for the past two years. The book value per share of common stock for the current year is

The formula used in vertical analysis of the balance sheet is: (each balance sheet line item/total assets)= vertical %.

In comparing companies of different sizes,which of the following is most helpful?

The McCumber Corporation data for the current year: With respect to net sales revenue,what would a horizontal analysis report?

In a horizontal analysis,the earlier period is the base period.

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