Question 1

What is George's gross profit rate if net sales are $100,000, operating expenses are $25,000, and cost of goods sold is $40,000?

Accepted Answer

A) 40.00% 
B) 25.0% 
C) 35.0% 
D) 60.0% 
A) 40.00% 
B) 25.0% 
C) 35.0% 
D) 60.0%

Question 2

A company has cash of $215,000; short-term investments of $35,000; net receivables of $75,000; and inventory of $150,000. Current liabilities total $90,000. The current ratio is:

Accepted Answer

A) 5.28:1. 
B) 4.44:1. 
C) 3.61:1. 
D) 4.89:1. 
A) 5.28:1. 
B) 4.44:1. 
C) 3.61:1. 
D) 4.89:1.

Question 3

Net income before taxes - preferred dividends divided by common stockholders' equity is the calculation for:

Accepted Answer

A) earnings per share. 
B) rate of return on stockholders' equity. 
C) rate of return on total assets. 
D) return on sales. 
A) earnings per share. 
B) rate of return on stockholders' equity. 
C) rate of return on total assets. 
D) return on sales.

Question 4

The ratio that indicates how many days it takes to turn accounts receivable into cash is the:

Accepted Answer

A) accounts receivable turnover ratio. 
B) average turnover ratio. 
C) average collection period. 
D) quick assets turnover ratio. 
A) accounts receivable turnover ratio. 
B) average turnover ratio. 
C) average collection period. 
D) quick assets turnover ratio.

Question 5

If management wishes to determine the average degree of delinquency of the charge customers, they could use the:

Accepted Answer

A) rate of return on total assets. 
B) rate of return on common stockholders' equity. 
C) accounts receivable turnover. 
D) quick (acid test)ratio. 
A) rate of return on total assets. 
B) rate of return on common stockholders' equity. 
C) accounts receivable turnover. 
D) quick (acid test)ratio.

Question 6

The sales of Mary's Services for Years 1, 2, and 3 are $25,000, $45,000, $60,000, respectively. The trend percentage for Year 3 is:

Accepted Answer

A) 42%. 
B) 240%. 
C) 140%. 
D) 58%. 
A) 42%. 
B) 240%. 
C) 140%. 
D) 58%.

Question 7

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1)liquidity, (column 2)asset management, (column 3)debt, or (column 4)profitability.
-

Accepted Answer

The answer of For each of the following items, indicate...

Question 8

The current ratio for a company with current assets of $70,000, current liabilities of $50,000, total assets of $150,000, and net sales of $80,000, would be:

Accepted Answer

A) 1.4. 
B) 0.714. 
C) 3.0. 
D) 0.875. 
A) 1.4. 
B) 0.714. 
C) 3.0. 
D) 0.875.

Question 9

Asset management ratios measure:

Accepted Answer

A) a company's ability to earn a profit. 
B) a company's ability to meet short-term obligations. 
C) how well a company is using debt versus equity. 
D) how effectively a company is using its assets. 
A) a company's ability to earn a profit. 
B) a company's ability to meet short-term obligations. 
C) how well a company is using debt versus equity. 
D) how effectively a company is using its assets.

Question 10

The net sales for James, Inc. were $4,000,000; net income was $510,000; and gross profit was $1,300,000. The return on sales ratio would be:

Accepted Answer

A) 12.75%. 
B) 32.50%. 
C) 45.25%. 
D) 39.23%. 
A) 12.75%. 
B) 32.50%. 
C) 45.25%. 
D) 39.23%.

Question 11

Net income was $45,000 in Year 1 and $60,000 in Year 2. The percentage increase in net income was:

Accepted Answer

A) 33.33%. 
B) 133.33%. 
C) (25%). 
D) (33.33). 
A) 33.33%. 
B) 133.33%. 
C) (25%). 
D) (33.33).

Question 12

The debt in relation to the risk taken by stockholders is measured by:

Accepted Answer

A) debt to stockholders' equity. 
B) gross profit ratio. 
C) rate of return to stockholders. 
D) None of these answers are correct. 
A) debt to stockholders' equity. 
B) gross profit ratio. 
C) rate of return to stockholders. 
D) None of these answers are correct.

Question 13

If current assets are $60,000 and current liabilities are $50,000, the current ratio is:

Accepted Answer

A) 0.8:1. 
B) 8.3:1. 
C) 2.1:1. 
D) 1.2:1 
A) 0.8:1. 
B) 8.3:1. 
C) 2.1:1. 
D) 1.2:1

Question 14

If the return on common stockholders' equity is less than the industry standard, it means the company is using debt financing successfully.

Accepted Answer

A) True 
 B)False

Question 15

If Rick's sales decreased from $90,000 (year 1)to $45,000 (year 2)and its cost of goods sold decreased from $30,000 (year 1)to $20,000 (year 2), then vertical analysis based on sales would show the following decreases for cost of goods sold for the two periods:

Accepted Answer

A) 33.33% and 44.44%. 
B) 44.44% and 33.33%. 
C) 300% and 225%. 
D) None of the above. 
A) 33.33% and 44.44%. 
B) 44.44% and 33.33%. 
C) 300% and 225%. 
D) None of the above.

Question 16

From the following balance sheet for Bricks Corporation, compute the common-size balance sheet amounts. (Round all percentages to nearest tenth of a percent.)
     Total Liabilities and

Accepted Answer

@#IMG-DLM& @#IMG-DLM& Total Li

Question 17

Smith Company has the following account balances:   Calculate Smith Company's current ratio.

Accepted Answer

A) 8.0:1 
B) 7.6:1 
C) 2.2: 
D) 1.1: 
A) 8.0:1 
B) 7.6:1 
C) 2.2: 
D) 1.1:

Question 18

If management wishes to measure how effectively the assets were used in generating a profit, they could use the:

Accepted Answer

A) rate of return on total assets. 
B) rate of return on common stockholders' equity. 
C) return on sales. 
D) times interest earned. 
A) rate of return on total assets. 
B) rate of return on common stockholders' equity. 
C) return on sales. 
D) times interest earned.

Question 19

Meranda Flower Corporation needs to develop a trend analysis for its sales and gross profit for the past three years to make decisions for the future. Compute the trend percentages with the information below and place your answers in the spaces provided.

Accepted Answer

The answer of Meranda Flower Corporation needs to develop a...

Question 20

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1)liquidity, (column 2)asset management, (column 3)debt, or (column 4)profitability.
-

Accepted Answer

The answer of For each of the following items, indicate...

Exam 22: Analyzing Financial Statements

What is George's gross profit rate if net sales are $100,000, operating expenses are $25,000, and cost of goods sold is $40,000?

A company has cash of $215,000; short-term investments of $35,000; net receivables of $75,000; and inventory of $150,000. Current liabilities total $90,000. The current ratio is:

Net income before taxes - preferred dividends divided by common stockholders' equity is the calculation for:

The ratio that indicates how many days it takes to turn accounts receivable into cash is the:

If management wishes to determine the average degree of delinquency of the charge customers, they could use the:

The sales of Mary's Services for Years 1, 2, and 3 are $25,000, $45,000, $60,000, respectively. The trend percentage for Year 3 is:

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1)liquidity, (column 2)asset management, (column 3)debt, or (column 4)profitability. -

The current ratio for a company with current assets of $70,000, current liabilities of $50,000, total assets of $150,000, and net sales of $80,000, would be:

Asset management ratios measure:

The net sales for James, Inc. were $4,000,000; net income was $510,000; and gross profit was $1,300,000. The return on sales ratio would be:

Net income was $45,000 in Year 1 and $60,000 in Year 2. The percentage increase in net income was:

The debt in relation to the risk taken by stockholders is measured by:

If current assets are $60,000 and current liabilities are $50,000, the current ratio is:

If the return on common stockholders' equity is less than the industry standard, it means the company is using debt financing successfully.

If Rick's sales decreased from $90,000 (year 1)to $45,000 (year 2)and its cost of goods sold decreased from $30,000 (year 1)to $20,000 (year 2), then vertical analysis based on sales would show the following decreases for cost of goods sold for the two periods:

From the following balance sheet for Bricks Corporation, compute the common-size balance sheet amounts. (Round all percentages to nearest tenth of a percent.) Total Liabilities and

Smith Company has the following account balances: Calculate Smith Company's current ratio.

If management wishes to measure how effectively the assets were used in generating a profit, they could use the:

Meranda Flower Corporation needs to develop a trend analysis for its sales and gross profit for the past three years to make decisions for the future. Compute the trend percentages with the information below and place your answers in the spaces provided.

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1)liquidity, (column 2)asset management, (column 3)debt, or (column 4)profitability. -

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes: the Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters