Question 1

Which of the following is considered an unusual item affecting the prior period's income statement?

Accepted Answer

A)  a change in accounting principles 
B)  fixed asset impairments 
C)  sale of company stores in Florida 
D)  discontinued operations 
A)  a change in accounting principles 
B)  fixed asset impairments 
C)  sale of company stores in Florida 
D)  discontinued operations

Question 2

A balance sheet shows cash,$75,000; marketable securities,$115,000; receivables,$150,000; and inventories,$222,500.Current liabilities are $225,000.The current ratio is 2.5.

Accepted Answer

A) True 
 B)False

Question 3

Balance sheet and income statement data indicate the following: ​
  Based on the data presented,what is the times interest earned ratio? (Round to one decimal point.)

Accepted Answer

A)  1.5 
B)  6.4 
C)  6.5 
D)  5.5 
A)  1.5 
B)  6.4 
C)  6.5 
D)  5.5

Question 4

The balance sheet data of Randolph Company for two recent years appears below:
​
​
   Round percentages to one decimal place.

Accepted Answer

The answer of The balance sheet data of Randolph Company...

Question 5

Income statement information for Sadie Company is below: ​
  Using vertical analysis of the income statement for Sadie Company,determine the gross profit margin.

Accepted Answer

A)  100% 
B)  66% 
C)  34% 
D)  29% 
A)  100% 
B)  66% 
C)  34% 
D)  29%

Question 6

Gallant Company reported net income of $2,500,000.The income statement included a $200,000 loss on discontinued operations,after applicable income tax.There were 100,000 shares of $10 par common stock and 40,000 shares of 4% preferred stock of $100 par outstanding throughout the current year.
​
Prepare the earnings per share section of Gallant Company's income statement.

Accepted Answer

The answer of Gallant Company reported net income of $2,500,000.The...

Question 7

Times interest earned is computed as

Accepted Answer

A)  net income plus interest expense,divided by interest expense 
B)  income before income tax plus interest expense,divided by interest expense 
C)  net income divided by interest expense 
D)  income before income tax divided by interest expense 
A)  net income plus interest expense,divided by interest expense 
B)  income before income tax plus interest expense,divided by interest expense 
C)  net income divided by interest expense 
D)  income before income tax divided by interest expense

Question 8

All of the following are typically included in the management's discussion and analysis in annual reports except

Accepted Answer

A)  explanations of any significant changes between the current and prior years' financial statements 
B)  management's assessment of liquidity 
C)  journal entries 
D)  off-balance-sheet arrangements 
A)  explanations of any significant changes between the current and prior years' financial statements 
B)  management's assessment of liquidity 
C)  journal entries 
D)  off-balance-sheet arrangements

Question 9

Earnings per share amounts are only required to be presented for income from continuing operations and net income on the face of the statement.

Accepted Answer

A) True 
 B)False

Question 10

For Garrison Corporation,the working capital at the end of the current year is $10,000 more than the working capital at the end of the preceding year,reported as follows:
​
​
   Has the current position of Garrison Corporation improved? Explain.

Accepted Answer

The amount of working capital and the ch

Question 11

In computing the asset turnover ratio,long-term investments are excluded from average total assets.

Accepted Answer

A) True 
 B)False

Question 12

Unusual items affecting the prior period's income statement consist of changes in or errors in applying accounting principles.

Accepted Answer

A) True 
 B)False

Question 13

Based on the data for Privett Company,what is the amount of quick assets?

Accepted Answer

A)  $168,000 
B)  $96,000 
C)  $60,000 
D)  $61,000 
A)  $168,000 
B)  $96,000 
C)  $60,000 
D)  $61,000

Question 14

When a corporation discontinues a segment of its operations at a loss,the loss should be reported as a separate item after income from continuing operations on the income statement.

Accepted Answer

A) True 
 B)False

Question 15

The return on total assets measures the profitability of total assets,without considering how the assets are financed.

Accepted Answer

A) True 
 B)False

Question 16

The particular analytical measures chosen to analyze a company may be influenced by all of the following except

Accepted Answer

A)  industry type 
B)  general economic environment 
C)  diversity of business operations 
D)  product quality or service effectiveness 
A)  industry type 
B)  general economic environment 
C)  diversity of business operations 
D)  product quality or service effectiveness

Question 17

The numerator in calculating the accounts receivable turnover is

Accepted Answer

A)  total assets 
B)  sales 
C)  accounts receivable at year-end 
D)  average accounts receivable 
A)  total assets 
B)  sales 
C)  accounts receivable at year-end 
D)  average accounts receivable

Question 18

Which of the following is required by the Sarbanes-Oxley Act?

Accepted Answer

A)  a price-earnings ratio 
B)  a report on internal control 
C)  a vertical analysis 
D)  a common-sized statement 
A)  a price-earnings ratio 
B)  a report on internal control 
C)  a vertical analysis 
D)  a common-sized statement

Question 19

Revenue and expense data for Young Technologies Inc.are as follows:
​
​

Accepted Answer

(a) Young Technologies Inc. Co

Question 20

The analysis of increases and decreases in the amount and percentage of comparative financial statement items is referred to as horizontal analysis.

Accepted Answer

A) True 
 B)False

Exam 14: Financial Statement Analysis

Which of the following is considered an unusual item affecting the prior period's income statement?

A balance sheet shows cash,$75,000; marketable securities,$115,000; receivables,$150,000; and inventories,$222,500.Current liabilities are $225,000.The current ratio is 2.5.

Balance sheet and income statement data indicate the following: ​ Based on the data presented,what is the times interest earned ratio? (Round to one decimal point.)

The balance sheet data of Randolph Company for two recent years appears below: ​ ​ Round percentages to one decimal place.

Income statement information for Sadie Company is below: ​ Using vertical analysis of the income statement for Sadie Company,determine the gross profit margin.

Times interest earned is computed as

All of the following are typically included in the management's discussion and analysis in annual reports except

Earnings per share amounts are only required to be presented for income from continuing operations and net income on the face of the statement.

For Garrison Corporation,the working capital at the end of the current year is $10,000 more than the working capital at the end of the preceding year,reported as follows: ​ ​ Has the current position of Garrison Corporation improved? Explain.

In computing the asset turnover ratio,long-term investments are excluded from average total assets.

Unusual items affecting the prior period's income statement consist of changes in or errors in applying accounting principles.

Based on the data for Privett Company,what is the amount of quick assets?

When a corporation discontinues a segment of its operations at a loss,the loss should be reported as a separate item after income from continuing operations on the income statement.

The return on total assets measures the profitability of total assets,without considering how the assets are financed.

The particular analytical measures chosen to analyze a company may be influenced by all of the following except

The numerator in calculating the accounts receivable turnover is

Which of the following is required by the Sarbanes-Oxley Act?

Revenue and expense data for Young Technologies Inc.are as follows: ​ ​

The analysis of increases and decreases in the amount and percentage of comparative financial statement items is referred to as horizontal analysis.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

Balance sheet and income statement data indicate the following: Based on the data presented,what is the times interest earned ratio? (Round to one decimal point.)

The balance sheet data of Randolph Company for two recent years appears below: Round percentages to one decimal place.

Income statement information for Sadie Company is below: Using vertical analysis of the income statement for Sadie Company,determine the gross profit margin.

For Garrison Corporation,the working capital at the end of the current year is $10,000 more than the working capital at the end of the preceding year,reported as follows: Has the current position of Garrison Corporation improved? Explain.

Revenue and expense data for Young Technologies Inc.are as follows: