Question 1

Internal users of accounting information make the strategic and operating decisions of a company.

Accepted Answer

A) True 
 B)False

Question 2

Match each of the following terms with the appropriate definitions.
-The application of analytical tools to general-purpose financial statements and related data for making business decisions.

Accepted Answer

A) Financial statement analysis 
B) Common-size financial statement 
C) Horizontal analysis 
D) Comparative financial statement 
E) Liquidity and efficiency
F)Market prospects
G)Debt to equity ratio
H)Solvency
I)Vertical analysis
J)Profitability 
A) Financial statement analysis 
B) Common-size financial statement 
C) Horizontal analysis 
D) Comparative financial statement 
E) Liquidity and efficiency
F)Market prospects
G)Debt to equity ratio
H)Solvency
I)Vertical analysis
J)Profitability

Question 3

$$\begin{array} { | l | r | r | } 
\hline&{ \text { Year 2 } } & { \text { Year 1 } } \
\hline \text { Cash } & \$ 37,500 & 36,850 \
\hline \text { Short-term investments } & 90,000 & 90,000 \
\hline \text { Accounts receivable, net } & 85,500 & 86,250 \
\hline \text { Merchandise inventory } & 121,000& 117,000 \
\hline \text { Prepaid expenses } & 12,100& 13,500 \
\hline \text { Plant assets } & 388,000 & 392,000 \
\hline \text { Accounts payable } & 113,400 & 111.750 \
\hline \text { Net sales } & 711,000 & 706,000 \
\hline \text { Cost of goods sold } & 390,000 & 385,500 \
\hline
\end{array}$$
-Refer to the following selected financial information from McCormik,LLC.Compute the company's accounts receivable turnover for Year 2.

Accepted Answer

A)  8.62. 
B)  8.28. 
C)  8.94. 
D)  5.78. 
E)  7.90. 
A)  8.62. 
B)  8.28. 
C)  8.94. 
D)  5.78. 
E)  7.90.

Question 4

Dividing Accounts receivable,net by Net sales and multiplying the result by 365 is the:

Accepted Answer

A)  Profit margin. 
B)  Days' sales uncollected. 
C)  Accounts receivable turnover ratio. 
D)  Average accounts receivable ratio. 
E)  Current ratio. 
A)  Profit margin. 
B)  Days' sales uncollected. 
C)  Accounts receivable turnover ratio. 
D)  Average accounts receivable ratio. 
E)  Current ratio.

Question 5

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The working capital is:

Accepted Answer

A)  141%. 
B)  71%. 
C)  ($56,000). 
D)  $56,000. 
E)  41%. 
A)  141%. 
B)  71%. 
C)  ($56,000). 
D)  $56,000. 
E)  41%.

Question 6

External users of accounting information manage and operate the company.

Accepted Answer

A) True 
 B)False

Question 7

Current assets minus current liabilities is:

Accepted Answer

A)  Profit margin. 
B)  Financial leverage. 
C)  Current ratio. 
D)  Working capital. 
E)  Quick assets. 
A)  Profit margin. 
B)  Financial leverage. 
C)  Current ratio. 
D)  Working capital. 
E)  Quick assets.

Question 8

General-purpose financial statements include the (1)________, (2)________, (3)________, (4)________ and (5)________.

Accepted Answer

income statement; balance shee

Question 9

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

Accepted Answer

A) True 
 B)False

Question 10

$$\begin{array} { | l | r | r | } 
\hline&{ \text { Year 2 } } & { \text { Year 1 } } \
\hline \text { Cash } & \$ 37,500 & 36,850 \
\hline \text { Short-term investments } & 90,000 & 90,000 \
\hline \text { Accounts receivable, net } & 85,500 & 86,250 \
\hline \text { Merchandise inventory } & 121,000 & 117,000 \
\hline \text { Prepaid expenses } & 12,100& 13,500 \
\hline \text { Plant assets } & 388,000 & 392,000 \
\hline \text { Accounts payable } & 113,400 & 111.750 \
\hline \text { Net sales } & 711,000 & 706,000 \
\hline \text { Cost of goods sold } & 390,000 & 385,500 \
\hline
\end{array}$$
-Refer to the following selected financial information from McCormik,LLC.Compute the company's inventory turnover for Year 2.

Accepted Answer

A)  4.72. 
B)  4.33. 
C)  3.28. 
D)  5.78. 
E)  3.86. 
A)  4.72. 
B)  4.33. 
C)  3.28. 
D)  5.78. 
E)  3.86.

Question 11

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once.
-Times Interest Earned

Accepted Answer

A) Market Prospects 
B) Liquidity and Efficiency 
C) Solvency 
D) Profitability 
A) Market Prospects 
B) Liquidity and Efficiency 
C) Solvency 
D) Profitability

Question 12

Comparative calendar year financial data for a company are shown below.Calculate the following ratios for 2018:
(a)return on total assets
(b)return on common stockholders' equity.

Accepted Answer

\[\begin{array} { | l | r | } 
\hline \t

Question 13

Zhang Company reported Cost of goods sold of $835,000 and ending Inventory of $41,750.The Days' sales in inventory (rounded to whole days)is:

Accepted Answer

A)  18 days. 
B)  418 days. 
C)  10 days. 
D)  56 days. 
E)  20 days. 
A)  18 days. 
B)  418 days. 
C)  10 days. 
D)  56 days. 
E)  20 days.

Question 14

Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:

Accepted Answer

A)  Inventory turnover ratio. 
B)  Profit margin. 
C)  Days' sales in inventory. 
D)  Current ratio. 
E)  Total asset turnover. 
A)  Inventory turnover ratio. 
B)  Profit margin. 
C)  Days' sales in inventory. 
D)  Current ratio. 
E)  Total asset turnover.

Question 15

Internal users of financial information:

Accepted Answer

A)  Are not directly involved in operating a company. 
B)  Are those individuals involved in managing and operating the company. 
C)  Include shareholders and lenders. 
D)  Include directors and customers. 
E)  Include suppliers, regulators, and the press. 
A)  Are not directly involved in operating a company. 
B)  Are those individuals involved in managing and operating the company. 
C)  Include shareholders and lenders. 
D)  Include directors and customers. 
E)  Include suppliers, regulators, and the press.

Question 16

A corporation reports the following year-end balance sheet data.The company's current ratio equals:
$$\begin{array} { l r l r } 
\text { Cash } & \$ 40,000 & \text { Current liabilities } & \$ 75,000 \
\text { Accounts receivable } & 55,000 & \text { Long-term liabilities } & 35,000 \
\text { Inventory } & 60,000 & \text { Common stock } & 100,000 \
\text { Equipment } & 145,000 & \text { Retained earnings } & 90,000 \
\text { Total assets } & \$ 300,000 & \text { Total liabilities and equity } & \$ 300,000
\end{array}$$

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 17

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 18

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

Accepted Answer

A) True 
 B)False

Question 19

Trend percentage is calculated by dividing ________ by ________ and multiplying the result by 100.

Accepted Answer

analysis p

Question 20

A corporation reports the following year-end balance sheet data.The company's equity ratio equals:
$$\begin{array} { | l | r |l |r | } 
\hline \text { Cash } & \$ 40,000 & \text { Current liabilities } & \$ 75,000 \
\hline \text { Accounts receivable } & 55,000 & \text { Long-term liabilities } & 35,000 \
\hline \text { Inventory } & 60,000 & \text { Common stock } & 100,000 \
\hline \text { Equipment } & 145,000 & \text { Retained earnings } & 90,000 \
\hline \text { Total assets } & \$ 300,000 & \text { Total liabilities and equity } & \$ 300,000 \
\hline
\end{array}$$

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

Internal users of accounting information make the strategic and operating decisions of a company.

Match each of the following terms with the appropriate definitions. -The application of analytical tools to general-purpose financial statements and related data for making business decisions.

Dividing Accounts receivable,net by Net sales and multiplying the result by 365 is the:

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The working capital is:

External users of accounting information manage and operate the company.

Current assets minus current liabilities is:

General-purpose financial statements include the (1), (2), (3), (4) and (5).

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once. -Times Interest Earned

Comparative calendar year financial data for a company are shown below.Calculate the following ratios for 2018: (a)return on total assets (b)return on common stockholders' equity.

Zhang Company reported Cost of goods sold of $835,000 and ending Inventory of $41,750.The Days' sales in inventory (rounded to whole days)is:

Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:

Internal users of financial information:

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

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

Trend percentage is calculated by dividing by and multiplying the result by 100.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 13: Analysis of Financial Statements

Internal users of accounting information make the strategic and operating decisions of a company.

Match each of the following terms with the appropriate definitions. -The application of analytical tools to general-purpose financial statements and related data for making business decisions.

Dividing Accounts receivable,net by Net sales and multiplying the result by 365 is the:

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The working capital is:

External users of accounting information manage and operate the company.

Current assets minus current liabilities is:

General-purpose financial statements include the (1)________, (2)________, (3)________, (4)________ and (5)________.

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once. -Times Interest Earned

Comparative calendar year financial data for a company are shown below.Calculate the following ratios for 2018: (a)return on total assets (b)return on common stockholders' equity.

Zhang Company reported Cost of goods sold of $835,000 and ending Inventory of $41,750.The Days' sales in inventory (rounded to whole days)is:

Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:

Internal users of financial information:

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

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

Trend percentage is calculated by dividing ________ by ________ and multiplying the result by 100.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters

General-purpose financial statements include the (1), (2), (3), (4) and (5).

Trend percentage is calculated by dividing by and multiplying the result by 100.