Question 1

A company has an obligation to provide highly detailed information on its financial statements.

Accepted Answer

A) True 
 B)False

Question 2

As of December 31,Year 1,Gant Corporation had a current ratio of 1.29,quick ratio of 1.05,and working capital of $18,000.The company uses a perpetual inventory system and sells merchandise for more than it cost.On January 1,Year 2,Gant sold inventory on account for $6,000.Which of the following statements is not true?

Accepted Answer

A) Gant's current ratio will decrease. 
B) Gant's quick ratio will increase. 
C) Gant's working capital will increase. 
D) None of these answers is correct. 
A) Gant's current ratio will decrease. 
B) Gant's quick ratio will increase. 
C) Gant's working capital will increase. 
D) None of these answers is correct.

Question 3

Benson Company received cash of $5,000,000 by issuing 20-year bonds payable.As a result of this transaction,the company's current ratio will:

Accepted Answer

A) Remain the same. 
B) Increase. 
C) Decrease. 
D) Cannot be determined. 
A) Remain the same. 
B) Increase. 
C) Decrease. 
D) Cannot be determined.

Question 4

Which type of approach should be used when evaluating corporate results using horizontal analysis?

Accepted Answer

A) Study of absolute amounts 
B) Percentages 
C) Trends 
D) All of these answers are correct. 
A) Study of absolute amounts 
B) Percentages 
C) Trends 
D) All of these answers are correct.

Question 5

Phips Company paid total cash dividends of $200,000 on 25,000 outstanding common shares.On the most recent trading day,the common shares sold at $80.What is this company's dividend yield?

Accepted Answer

A) 25% 
B) 6.4% 
C) 16.9% 
D) 10% 
A) 25% 
B) 6.4% 
C) 16.9% 
D) 10%

Question 6

Rialto Company collected $5,000 on account.What impact will this transaction have on the firm's current ratio?

Accepted Answer

A) No impact 
B) Increase it 
C) Decrease it 
D) Not enough information is provided to answer the question. 
A) No impact 
B) Increase it 
C) Decrease it 
D) Not enough information is provided to answer the question.

Question 7

Horizontal analysis is also known as:

Accepted Answer

A) Liquidity analysis. 
B) Trend analysis. 
C) Revenue analysis. 
D) Variance analysis. 
A) Liquidity analysis. 
B) Trend analysis. 
C) Revenue analysis. 
D) Variance analysis.

Question 8

You are considering an investment in Apple stock and wish to assess the firm's short-term debt-paying ability.All of the following ratios are used to assess liquidity except:

Accepted Answer

A) Debt to equity ratio. 
B) Inventory turnover. 
C) Quick ratio. 
D) Accounts receivable turnover. 
A) Debt to equity ratio. 
B) Inventory turnover. 
C) Quick ratio. 
D) Accounts receivable turnover.

A company has an obligation to provide highly detailed information on its financial statements.

Benson Company received cash of $5,000,000 by issuing 20-year bonds payable.As a result of this transaction,the company's current ratio will:

Which type of approach should be used when evaluating corporate results using horizontal analysis?

Phips Company paid total cash dividends of $200,000 on 25,000 outstanding common shares.On the most recent trading day,the common shares sold at $80.What is this company's dividend yield?

Rialto Company collected $5,000 on account.What impact will this transaction have on the firm's current ratio?

Horizontal analysis is also known as:

You are considering an investment in Apple stock and wish to assess the firm's short-term debt-paying ability.All of the following ratios are used to assess liquidity except:

An Introduction to Accounting

Accounting for Accruals and Deferrals

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Filters

Exam 13: Financial Statement Analysis

A company has an obligation to provide highly detailed information on its financial statements.

Benson Company received cash of $5,000,000 by issuing 20-year bonds payable.As a result of this transaction,the company's current ratio will:

Which type of approach should be used when evaluating corporate results using horizontal analysis?

Phips Company paid total cash dividends of $200,000 on 25,000 outstanding common shares.On the most recent trading day,the common shares sold at $80.What is this company's dividend yield?

Rialto Company collected $5,000 on account.What impact will this transaction have on the firm's current ratio?

Horizontal analysis is also known as:

You are considering an investment in Apple stock and wish to assess the firm's short-term debt-paying ability.All of the following ratios are used to assess liquidity except:

An Introduction to Accounting

Accounting for Accruals and Deferrals

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Filters