Question 1

An unusual item is often related to current operations and occurs infrequently.

Accepted Answer

A) True 
 B)False

Question 2

In horizontal analysis,each item is expressed as a percentage of the

Accepted Answer

A)  base year figure 
B)  retained earnings figure 
C)  total assets figure 
D)  net income figure 
A)  base year figure 
B)  retained earnings figure 
C)  total assets figure 
D)  net income figure

Question 3

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000.It had 50,000 shares of common stock outstanding during the entire year.Richards Corporation's common stock is selling for $35 per share.The price-earnings ratio is

Accepted Answer

A)  7 times 
B)  14 times 
C)  2 times 
D)  5 times 
A)  7 times 
B)  14 times 
C)  2 times 
D)  5 times

Question 4

Match each ratio that follows to its use (items a-h).Items may be used more than once.
-quick ratio

Accepted Answer

A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders
   
A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders

Question 5

The numerator of the return on common stockholders' equity is

Accepted Answer

A)  net income 
B)  net income minus preferred dividends 
C)  income before income tax 
D)  operating income minus interest expense 
A)  net income 
B)  net income minus preferred dividends 
C)  income before income tax 
D)  operating income minus interest expense

Question 6

A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability.The amount of working capital immediately after payment is

Accepted Answer

A)  $845,000 
B)  $595,000 
C)  $720,000 
D)  $125,000 
A)  $845,000 
B)  $595,000 
C)  $720,000 
D)  $125,000

Question 7

Based on the data for Privett Company,what is the amount of working capital?

Accepted Answer

A)  $213,000 
B)  $113,000 
C)  $153,000 
D)  $39,000 
A)  $213,000 
B)  $113,000 
C)  $153,000 
D)  $39,000

Question 8

A company can compare its financial data to the data of other companies and industry averages to evaluate its position.

Accepted Answer

A) True 
 B)False

Question 9

An increase in the accounts receivable turnover may be due to a change in how credit is granted and / or in collection practices.

Accepted Answer

A) True 
 B)False

Question 10

What is the price-earnings ratio for Diane Company?

Accepted Answer

A)  8.0 times 
B)  2.5 times 
C)  4.0 times 
D)  6.0 times 
A)  8.0 times 
B)  2.5 times 
C)  4.0 times 
D)  6.0 times

Question 11

Which of the following measures a company's ability to pay its current liabilities?

Accepted Answer

A)  earnings per share 
B)  inventory turnover 
C)  current ratio 
D)  times interest earned 
A)  earnings per share 
B)  inventory turnover 
C)  current ratio 
D)  times interest earned

Question 12

A company reports the following:
​
   Determine the asset turnover ratio.Round your answer to one decimal place.

Accepted Answer

Asset turnover ratio = Sales /

Question 13

If a company has issued only one class of stock,the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 14

In a company's annual report,the section called Management Discussion and Analysis provides critical information for interpreting the financial statements and assessing the future of the company.

Accepted Answer

A) True 
 B)False

Question 15

Cash and accounts receivable for Ashfall Co.are provided below:
​
   Based on this information,what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Round percentages to one decimal place.

Accepted Answer

The answer of Cash and accounts receivable for Ashfall Co.are...

Question 16

The following information is available for Meyer Company: ​
  Which of the following statements is correct?

Accepted Answer

A)  The dividend yield is 6.0%,which is of interest to investors seeking an increase in market price of their stocks. 
B)  The dividend yield is 6.0%,which is of special interest to investors seeking to earn revenue on their investments. 
C)  The dividend yield is 16.7%,which is of interest to bondholders. 
D)  The dividend yield is 16.7% which is an important measure of solvency. 
A)  The dividend yield is 6.0%,which is of interest to investors seeking an increase in market price of their stocks. 
B)  The dividend yield is 6.0%,which is of special interest to investors seeking to earn revenue on their investments. 
C)  The dividend yield is 16.7%,which is of interest to bondholders. 
D)  The dividend yield is 16.7% which is an important measure of solvency.

Question 17

The ratio of the market price per share of common stock on a specific date to the annual earnings per share is referred to as the price-earnings ratio.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  $205,000 
B)  $203,000 
C)  $131,000 
D)  $66,000 
A)  $205,000 
B)  $203,000 
C)  $131,000 
D)  $66,000

Question 19

Match each ratio that follows to its use (items a-h).Items may be used more than once.
-return on common stockholders' equity

Accepted Answer

A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders
   
A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders

Question 20

A company reports the following:
​
   Determine the times interest earned.Round your answer to one decimal place.

Accepted Answer

Times interest earned = (Incom

Exam 14: Financial Statement Analysis

An unusual item is often related to current operations and occurs infrequently.

In horizontal analysis,each item is expressed as a percentage of the

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000.It had 50,000 shares of common stock outstanding during the entire year.Richards Corporation's common stock is selling for $35 per share.The price-earnings ratio is

Match each ratio that follows to its use (items a-h).Items may be used more than once. -quick ratio

The numerator of the return on common stockholders' equity is

A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability.The amount of working capital immediately after payment is

Based on the data for Privett Company,what is the amount of working capital?

A company can compare its financial data to the data of other companies and industry averages to evaluate its position.

An increase in the accounts receivable turnover may be due to a change in how credit is granted and / or in collection practices.

What is the price-earnings ratio for Diane Company?

Which of the following measures a company's ability to pay its current liabilities?

A company reports the following: ​ Determine the asset turnover ratio.Round your answer to one decimal place.

If a company has issued only one class of stock,the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding.

In a company's annual report,the section called Management Discussion and Analysis provides critical information for interpreting the financial statements and assessing the future of the company.

Cash and accounts receivable for Ashfall Co.are provided below: ​ Based on this information,what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Round percentages to one decimal place.

The following information is available for Meyer Company: ​ Which of the following statements is correct?

The ratio of the market price per share of common stock on a specific date to the annual earnings per share is referred to as the price-earnings ratio.

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

Match each ratio that follows to its use (items a-h).Items may be used more than once. -return on common stockholders' equity

A company reports the following: ​ Determine the times interest earned.Round your answer to one decimal place.

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

A company reports the following: Determine the asset turnover ratio.Round your answer to one decimal place.

Cash and accounts receivable for Ashfall Co.are provided below: Based on this information,what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Round percentages to one decimal place.

The following information is available for Meyer Company: Which of the following statements is correct?

A company reports the following: Determine the times interest earned.Round your answer to one decimal place.