Question 1

An example of horizontal analysis is the increase in cost of goods sold by 25% from Year 1 to Year 2.

Accepted Answer

A) True 
 B)False

Question 2

For meaningful analysis, ratios should be compared with a ____________.

Accepted Answer

The answer of For meaningful analysis, ratios should be compared...

Question 3

The current assets of Caitlin Company are $360,000.The current liabilities are $240,000.The current ratio is

Accepted Answer

A)  1.25. 
B)  1.50. 
C)  0.67. 
D)  cannot be determined from the information provided. 
A)  1.25. 
B)  1.50. 
C)  0.67. 
D)  cannot be determined from the information provided.

Question 4

Match the classifications of ratios with each description.
-Allows evaluation of the extent to which funds are used efficiently

Accepted Answer

A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
D) Horizontal Analysis 
E) Trend Analysis 
A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
D) Horizontal Analysis 
E) Trend Analysis

Question 5

How long it takes a company to turn its receivables into cash is known as the ________________.

Accepted Answer

accounts r

Question 6

_________________ measure the ability of a company to meet its current obligations.

Accepted Answer

The answer of _________________ measure the ability of a company...

Question 7

In vertical analysis

Accepted Answer

A)  a base amount is required. 
B)  a base amount is optional. 
C)  the same base is used across all financial statements analyzed. 
D)  the results of the horizontal analysis are necessary inputs for performing the analysis. 
A)  a base amount is required. 
B)  a base amount is optional. 
C)  the same base is used across all financial statements analyzed. 
D)  the results of the horizontal analysis are necessary inputs for performing the analysis.

Question 8

Kringle Company, a retailer, had cost of goods sold of $1,400,000 last year.The beginning inventory balance was $125,000 and the ending inventory balance was $142,000.The company's inventory turnover ratio was closest to

Accepted Answer

A)  10.49. 
B)  5.24. 
C)  11.20. 
D)  9.86. 
A)  10.49. 
B)  5.24. 
C)  11.20. 
D)  9.86.

Question 9

Which of the following statements is true of trend analysis?

Accepted Answer

A)  It tracks the percentage changes of items in financial statements over several years. 
B)  It computes percentages by dividing one account or line-item amount by another. 
C)  It expresses the line item as a percentage of some other line item for the same period. 
D)  It measure the ability of a company to meet its current obligations. 
A)  It tracks the percentage changes of items in financial statements over several years. 
B)  It computes percentages by dividing one account or line-item amount by another. 
C)  It expresses the line item as a percentage of some other line item for the same period. 
D)  It measure the ability of a company to meet its current obligations.

Question 10

A company has a receivables turnover of 15 times.The average net receivables during the period are $430,000.What is the amount of net credit sales for the period?

Accepted Answer

A)  $430,000 
B)  $6,450,000 
C)  $6,000,000 
D)  $500,000 
A)  $430,000 
B)  $6,450,000 
C)  $6,000,000 
D)  $500,000

Question 11

Grant Company reported the following on its income statement:  
An analysis of the income statement revealed that interest expense was $60,000.Grant Company's times-interest-earned ratio was

Accepted Answer

A)  8. 
B)  7. 
C)  6. 
D)  5. 
A)  8. 
B)  7. 
C)  6. 
D)  5.

Question 12

Indicate the type of each ratio listed below.
-Dividend payout ratio

Accepted Answer

A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio

Question 13

Match the classifications of ratios with each description.
-Measures the ability of the company to meet its current obligations

Accepted Answer

A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
D) Horizontal Analysis 
E) Trend Analysis 
A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
D) Horizontal Analysis 
E) Trend Analysis

Question 14

If equal amounts are added to the numerator and the denominator of a current ratio equal to one, the ratio will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  equal zero. 
A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  equal zero.

Question 15

In vertical analysis, line items on the income statement are generally expressed as a percentage of

Accepted Answer

A)  net income. 
B)  net sales. 
C)  cost of goods sold. 
D)  total assets. 
A)  net income. 
B)  net sales. 
C)  cost of goods sold. 
D)  total assets.

Question 16

Match the classifications of ratios with each description.
-Measures the ability of a company to meet long and short term obligations

Accepted Answer

A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
D) Horizontal Analysis 
E) Trend Analysis 
A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
D) Horizontal Analysis 
E) Trend Analysis

Question 17

If a company has an acid-test ratio of 1.2, what respective effects will the borrowing of cash by short-term debt and the collection of accounts receivable have on the ratio? Short-term Collection of
Borrowing Receivable

Accepted Answer

A)  Increase No effect 
B)  Increase Increase 
C)  Decrease No effect 
D)  Decrease Decrease 
A)  Increase No effect 
B)  Increase Increase 
C)  Decrease No effect 
D)  Decrease Decrease

Question 18

Liquidity ratios measure the ability of a company to meet its current obligations.

Accepted Answer

A) True 
 B)False

Question 19

Indicate the type of each ratio listed below.
-Return on sales

Accepted Answer

A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio

Question 20

Opal Company has total assets of $600,000 and total liabilities of $200,000.The company's debt-to-equity ratio is closest to:

Accepted Answer

A)  0.35. 
B)  0.15. 
C)  0.50. 
D)  0.20. 
A)  0.35. 
B)  0.15. 
C)  0.50. 
D)  0.20.

An example of horizontal analysis is the increase in cost of goods sold by 25% from Year 1 to Year 2.

For meaningful analysis, ratios should be compared with a ____________.

The current assets of Caitlin Company are $360,000.The current liabilities are $240,000.The current ratio is

Match the classifications of ratios with each description. -Allows evaluation of the extent to which funds are used efficiently

How long it takes a company to turn its receivables into cash is known as the ________________.

_________________ measure the ability of a company to meet its current obligations.

In vertical analysis

Kringle Company, a retailer, had cost of goods sold of $1,400,000 last year.The beginning inventory balance was $125,000 and the ending inventory balance was $142,000.The company's inventory turnover ratio was closest to

Which of the following statements is true of trend analysis?

A company has a receivables turnover of 15 times.The average net receivables during the period are $430,000.What is the amount of net credit sales for the period?

Grant Company reported the following on its income statement: An analysis of the income statement revealed that interest expense was $60,000.Grant Company's times-interest-earned ratio was

Indicate the type of each ratio listed below. -Dividend payout ratio

Match the classifications of ratios with each description. -Measures the ability of the company to meet its current obligations

If equal amounts are added to the numerator and the denominator of a current ratio equal to one, the ratio will

In vertical analysis, line items on the income statement are generally expressed as a percentage of

Match the classifications of ratios with each description. -Measures the ability of a company to meet long and short term obligations

If a company has an acid-test ratio of 1.2, what respective effects will the borrowing of cash by short-term debt and the collection of accounts receivable have on the ratio? Short-term Collection of Borrowing Receivable

Liquidity ratios measure the ability of a company to meet its current obligations.

Indicate the type of each ratio listed below. -Return on sales

Opal Company has total assets of $600,000 and total liabilities of $200,000.The company's debt-to-equity ratio is closest to:

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Filters

Exam 15: Financial Statement Analysis

An example of horizontal analysis is the increase in cost of goods sold by 25% from Year 1 to Year 2.

For meaningful analysis, ratios should be compared with a ____________.

The current assets of Caitlin Company are $360,000.The current liabilities are $240,000.The current ratio is

Match the classifications of ratios with each description. -Allows evaluation of the extent to which funds are used efficiently

How long it takes a company to turn its receivables into cash is known as the ________________.

_________________ measure the ability of a company to meet its current obligations.

In vertical analysis

Kringle Company, a retailer, had cost of goods sold of $1,400,000 last year.The beginning inventory balance was $125,000 and the ending inventory balance was $142,000.The company's inventory turnover ratio was closest to

Which of the following statements is true of trend analysis?

A company has a receivables turnover of 15 times.The average net receivables during the period are $430,000.What is the amount of net credit sales for the period?

Grant Company reported the following on its income statement: An analysis of the income statement revealed that interest expense was $60,000.Grant Company's times-interest-earned ratio was

Indicate the type of each ratio listed below. -Dividend payout ratio

Match the classifications of ratios with each description. -Measures the ability of the company to meet its current obligations

If equal amounts are added to the numerator and the denominator of a current ratio equal to one, the ratio will

In vertical analysis, line items on the income statement are generally expressed as a percentage of

Match the classifications of ratios with each description. -Measures the ability of a company to meet long and short term obligations

If a company has an acid-test ratio of 1.2, what respective effects will the borrowing of cash by short-term debt and the collection of accounts receivable have on the ratio? Short-term Collection of Borrowing Receivable

Liquidity ratios measure the ability of a company to meet its current obligations.

Indicate the type of each ratio listed below. -Return on sales

Opal Company has total assets of $600,000 and total liabilities of $200,000.The company's debt-to-equity ratio is closest to:

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Filters