Question 1

Trend analysis is computing percents that show patterns in data across periods.

Accepted Answer

A) True 
 B)False

Question 2

The current ratio and acid-test ratio are used to reflect the ________ of a business.

Accepted Answer

The answer of The current ratio and acid-test ratio are...

Question 3

Internal users of accounting information manage and operate the company.

Accepted Answer

A) True 
 B)False

Question 4

Refer to the following selected financial information from Texas Electronics.
 
-Compute the company's days' sales uncollected for Year 2.(Use 365 days a year.)

Accepted Answer

A) 43.9. 
B) 42.3. 
C) 46.2. 
D) 80.0. 
E) 113.3. 
A) 43.9. 
B) 42.3. 
C) 46.2. 
D) 80.0. 
E) 113.3.

Question 5

Calculate the percent increases for each of the following selected balance sheet items.

Accepted Answer

The answer of Calculate the percent increases for each of...

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

A company with a low inventory turnover requires a smaller investment in inventory than one producing the same sales with a higher turnover.

Accepted Answer

A) True 
 B)False

Question 8

Use the following selected information from Whitman Corp.
 
-To determine the Year 1 and Year 2 common size percentages for operating expenses using Net sales as the base.

Accepted Answer

A) 36.4% for Year 2 and 41.1% for Year 1. 
B) 55.0% for Year 2 and 56.0% for Year 1. 
C) 23.9% for Year 2 and 23.0% for Year 1. 
D) 103.8% for Year 2 and 100.0% for Year 1. 
E) 20.0% for Year 2 and 23.0% for Year 1. 
A) 36.4% for Year 2 and 41.1% for Year 1. 
B) 55.0% for Year 2 and 56.0% for Year 1. 
C) 23.9% for Year 2 and 23.0% for Year 1. 
D) 103.8% for Year 2 and 100.0% for Year 1. 
E) 20.0% for Year 2 and 23.0% for Year 1.

Question 9

If a company is comparing this year's financial performance to last year's financial performance,it is using horizontal analysis.

Accepted Answer

A) True 
 B)False

Question 10

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

Accepted Answer

A) True 
 B)False

Question 11

A corporation reports the following year-end balance sheet data.
 
-The company's debt-to-equity ratio equals:

Accepted Answer

A) 0.58 
B) 1.27 
C) 2.07 
D) 0.37 
E) 0.63 
A) 0.58 
B) 1.27 
C) 2.07 
D) 0.37 
E) 0.63

Question 12

The ability to meet short-term obligations and to efficiently generate revenues is called:

Accepted Answer

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

Question 13

Debt financing is considered riskier than equity financing because of its required payments of interest and principal.

Accepted Answer

A) True 
 B)False

Question 14

Refer to the following selected financial information from Whirlpool Company.
 
-Compute the company's accounts receivable turnover for Year 2.

Accepted Answer

A) 8.36. 
B) 8.37. 
C) 4.78. 
D) 8.59. 
E) 8.54. 
A) 8.36. 
B) 8.37. 
C) 4.78. 
D) 8.59. 
E) 8.54.

Question 15

Refer to the following selected financial information from Mojave Corp.Compute the company's times interest earned.

Accepted Answer

A) 6.2. 
B) 2.5. 
C) 8.7. 
D) 9.7. 
E) 3.7. 
A) 6.2. 
B) 2.5. 
C) 8.7. 
D) 9.7. 
E) 3.7.

Question 16

Common-size statements:

Accepted Answer

A) Reveal changes in the relative importance of each financial statement item to a base amount. 
B) Do not emphasize the relative importance of each item. 
C) Compare financial statements over time. 
D) Show the dollar amount of change for financial statement items. 
E) Reveal patterns in data across successive periods. 
A) Reveal changes in the relative importance of each financial statement item to a base amount. 
B) Do not emphasize the relative importance of each item. 
C) Compare financial statements over time. 
D) Show the dollar amount of change for financial statement items. 
E) Reveal patterns in data across successive periods.

Question 17

Use the following selected information from Whitman Corp.
 
-To determine the Year 1 and Year 2 common size percentages for cost of goods sold using Net sales as the base.

Accepted Answer

A) 36.4% for year 2 and 41.1% for year 1. 
B) 55.0% for year 2 and 56.0% for year 1. 
C) 119.4% for year 2 and 100.0% for year 1. 
D) 117.2% for year 2 and 100.0% for year 1. 
E) 65.1% for year 2 and 56.0% for year 1. 
A) 36.4% for year 2 and 41.1% for year 1. 
B) 55.0% for year 2 and 56.0% for year 1. 
C) 119.4% for year 2 and 100.0% for year 1. 
D) 117.2% for year 2 and 100.0% for year 1. 
E) 65.1% for year 2 and 56.0% for year 1.

Question 18

Net income divided by net sales is the:

Accepted Answer

A) Return on total assets. 
B) Profit margin. 
C) Current ratio. 
D) Total asset turnover. 
E) Days' sales in inventory. 
A) Return on total assets. 
B) Profit margin. 
C) Current ratio. 
D) Total asset turnover. 
E) Days' sales in inventory.

Question 19

Refer to the following selected financial information from Whirlpool Company.
 
-Compute the company's days' sales uncollected for Year 2.(Use 365 days a year.)

Accepted Answer

A) 43.9. 
B) 43.7. 
C) 46.2. 
D) 85.4. 
E) 42.7. 
A) 43.9. 
B) 43.7. 
C) 46.2. 
D) 85.4. 
E) 42.7.

Question 20

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

Accepted Answer

A) Horizontal analysis. 
B) Vertical analysis. 
C) Political analysis. 
D) Fair value reporting. 
E) Liquidation analysis. 
A) Horizontal analysis. 
B) Vertical analysis. 
C) Political analysis. 
D) Fair value reporting. 
E) Liquidation analysis.

Exam 13: Analysis of Financial Statements

Trend analysis is computing percents that show patterns in data across periods.

The current ratio and acid-test ratio are used to reflect the ________ of a business.

Internal users of accounting information manage and operate the company.

Refer to the following selected financial information from Texas Electronics. -Compute the company's days' sales uncollected for Year 2.(Use 365 days a year.)

Calculate the percent increases for each of the following selected balance sheet items.

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

A company with a low inventory turnover requires a smaller investment in inventory than one producing the same sales with a higher turnover.

Use the following selected information from Whitman Corp. -To determine the Year 1 and Year 2 common size percentages for operating expenses using Net sales as the base.

If a company is comparing this year's financial performance to last year's financial performance,it is using horizontal analysis.

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

A corporation reports the following year-end balance sheet data. -The company's debt-to-equity ratio equals:

The ability to meet short-term obligations and to efficiently generate revenues is called:

Debt financing is considered riskier than equity financing because of its required payments of interest and principal.

Refer to the following selected financial information from Whirlpool Company. -Compute the company's accounts receivable turnover for Year 2.

Refer to the following selected financial information from Mojave Corp.Compute the company's times interest earned.

Common-size statements:

Use the following selected information from Whitman Corp. -To determine the Year 1 and Year 2 common size percentages for cost of goods sold using Net sales as the base.

Net income divided by net sales is the:

Refer to the following selected financial information from Whirlpool Company. -Compute the company's days' sales uncollected for Year 2.(Use 365 days a year.)

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

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and 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

Time Value of Money

Investments

Lean Principles and Accounting

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