Question 1

The following items are reported on a company's balance sheet:
​
   Determine the (a)current ratio,and (b)quick ratio.Round your answer to one decimal place.

Accepted Answer

The answer of The following items are reported on a...

Question 2

Horizontal analysis is a technique for evaluating financial statement data

Accepted Answer

A)  for one period of time 
B)  over a period of time 
C)  on a certain date 
D)  as it may appear in the future 
A)  for one period of time 
B)  over a period of time 
C)  on a certain date 
D)  as it may appear in the future

Question 3

If a firm has a current ratio of 2,the subsequent collection of a 60-day note receivable on account will cause the ratio to decrease.

Accepted Answer

A) True 
 B)False

Question 4

Leverage implies that a company

Accepted Answer

A)  contains debt financing 
B)  contains equity financing 
C)  has a high current ratio 
D)  has a high earnings per share 
A)  contains debt financing 
B)  contains equity financing 
C)  has a high current ratio 
D)  has a high earnings per share

Question 5

The balance sheet for Seuss Company at the end of the current fiscal year indicated the following:
​
​
   Income before income tax was $1,500,000 and income taxes were $200,000 for the current year.Cash dividends paid on common stock during the current year totaled $150,000.The common stock sells for $75 per share at the end of the year.
​
Determine each of the following:
​
   Round to one decimal place except earnings per share and dividends per share,which should be rounded to two decimal places.

Accepted Answer

The answer of The balance sheet for Seuss Company at...

Question 6

Solvency analysis focuses on the ability of a business to pay its current and noncurrent liabilities.

Accepted Answer

A) True 
 B)False

Question 7

Hsu Company reported the following on its income statement: ​
  Interest expense was $80,000.Hsu Company's times interest earned ratio is

Accepted Answer

A)  8 times 
B)  6.25 times 
C)  5.25 times 
D)  5 times 
A)  8 times 
B)  6.25 times 
C)  5.25 times 
D)  5 times

Question 8

In a common-sized income statement,100% is the

Accepted Answer

A)  net cost of goods sold 
B)  net income 
C)  gross profit 
D)  sales 
A)  net cost of goods sold 
B)  net income 
C)  gross profit 
D)  sales

Question 9

Assuming that the quantities of inventory on hand during the current year were sufficient to meet all demands for sales,a decrease in the inventory turnover for the current year when compared with the turnover for the preceding year indicates an improvement in inventory management.

Accepted Answer

A) True 
 B)False

Question 10

The following data are taken from the balance sheet at the end of the current year.
​
​
   Determine the (a)working capital,(b)current ratio,and (c)quick ratio.Round ratios to one decimal place.

Accepted Answer

The answer of The following data are taken from the...

Question 11

An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to

Accepted Answer

A)  decrease 
B)  remain the same 
C)  either increase or decrease 
D)  increase 
A)  decrease 
B)  remain the same 
C)  either increase or decrease 
D)  increase

Question 12

The following items are reported on Denver Company's balance sheet:
​
​
   Determine (a)the current ratio and (b)the quick ratio.Round to one decimal place.

Accepted Answer

The answer of The following items are reported on Denver...

Question 13

Based on the following data for the current year,what is the number of days' sales in receivables?

Accepted Answer

A)  7.3 
B)  2.5 
C)  14.6 
D)  25 
A)  7.3 
B)  2.5 
C)  14.6 
D)  25

Question 14

In horizontal analysis,the current year is the base year.

Accepted Answer

A) True 
 B)False

Question 15

Comparing dividends per share to earnings per share indicates the extent to which the corporation is retaining its earnings for use in operations.

Accepted Answer

A) True 
 B)False

Question 16

In the vertical analysis of an income statement,each item is generally stated as a percentage of total assets.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following items should be classified as an unusual item on an income statement?

Accepted Answer

A)  gain on the retirement of a bond payable 
B)  gain on a sale of a long-term investment 
C)  loss due to a discontinued operation in Colorado 
D)  selling treasury stock for more than the company paid for it 
A)  gain on the retirement of a bond payable 
B)  gain on a sale of a long-term investment 
C)  loss due to a discontinued operation in Colorado 
D)  selling treasury stock for more than the company paid for it

Question 18

The percentage analysis of increases and decreases in individual items in comparative financial statements is called

Accepted Answer

A)  vertical analysis 
B)  solvency analysis 
C)  profitability analysis 
D)  horizontal analysis 
A)  vertical analysis 
B)  solvency analysis 
C)  profitability analysis 
D)  horizontal analysis

Question 19

In a vertical analysis,the base for cost of goods sold is

Accepted Answer

A)  total selling expenses 
B)  sales 
C)  total expenses 
D)  gross profit 
A)  total selling expenses 
B)  sales 
C)  total expenses 
D)  gross profit

Question 20

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

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

Exam 14: Financial Statement Analysis

The following items are reported on a company's balance sheet: ​ Determine the (a)current ratio,and (b)quick ratio.Round your answer to one decimal place.

Horizontal analysis is a technique for evaluating financial statement data

If a firm has a current ratio of 2,the subsequent collection of a 60-day note receivable on account will cause the ratio to decrease.

Leverage implies that a company

Solvency analysis focuses on the ability of a business to pay its current and noncurrent liabilities.

Hsu Company reported the following on its income statement: ​ Interest expense was $80,000.Hsu Company's times interest earned ratio is

In a common-sized income statement,100% is the

Assuming that the quantities of inventory on hand during the current year were sufficient to meet all demands for sales,a decrease in the inventory turnover for the current year when compared with the turnover for the preceding year indicates an improvement in inventory management.

The following data are taken from the balance sheet at the end of the current year. ​ ​ Determine the (a)working capital,(b)current ratio,and (c)quick ratio.Round ratios to one decimal place.

An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to

The following items are reported on Denver Company's balance sheet: ​ ​ Determine (a)the current ratio and (b)the quick ratio.Round to one decimal place.

Based on the following data for the current year,what is the number of days' sales in receivables?

In horizontal analysis,the current year is the base year.

Comparing dividends per share to earnings per share indicates the extent to which the corporation is retaining its earnings for use in operations.

In the vertical analysis of an income statement,each item is generally stated as a percentage of total assets.

Which of the following items should be classified as an unusual item on an income statement?

The percentage analysis of increases and decreases in individual items in comparative financial statements is called

In a vertical analysis,the base for cost of goods sold is

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

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

The following items are reported on a company's balance sheet: Determine the (a)current ratio,and (b)quick ratio.Round your answer to one decimal place.

Hsu Company reported the following on its income statement: Interest expense was $80,000.Hsu Company's times interest earned ratio is

The following data are taken from the balance sheet at the end of the current year. Determine the (a)working capital,(b)current ratio,and (c)quick ratio.Round ratios to one decimal place.

The following items are reported on Denver Company's balance sheet: Determine (a)the current ratio and (b)the quick ratio.Round to one decimal place.