Question 1

How is the trend percentage for sales in 2019 computed? The base year is 2012.

Accepted Answer

A) Year 2019 sales ÷ Year 2012 sales 
B) (Year 2019 sales - Year 2012 sales)÷ Year 2012 sales 
C) (Year 2019 sales - Year 2012 sales)÷ Year 2019 sales 
D) (Year 2019 sales ÷ Year 2012 sales)× 100 
A) Year 2019 sales ÷ Year 2012 sales 
B) (Year 2019 sales - Year 2012 sales)÷ Year 2012 sales 
C) (Year 2019 sales - Year 2012 sales)÷ Year 2019 sales 
D) (Year 2019 sales ÷ Year 2012 sales)× 100

Question 2

Every public company's annual report filed begins with the income statement.

Accepted Answer

A) True 
 B)False

Question 3

On a common-size balance sheet,each line item is expressed as a percentage of:

Accepted Answer

A) current assets. 
B) operating income. 
C) total assets. 
D) net income. 
A) current assets. 
B) operating income. 
C) total assets. 
D) net income.

Question 4

For the period from 2019 to 2020,a company reports the following:   If sales are $8,000,000 in 2019,what are sales in 2020?

Accepted Answer

A) $3,200,000 
B) $8,000,000 
C) $10,800,000 
D) $11,200,000 
A) $3,200,000 
B) $8,000,000 
C) $10,800,000 
D) $11,200,000

Question 5

Ratios that test liquidity include all of the following EXCEPT:

Accepted Answer

A) acid-test ratio. 
B) current ratio. 
C) return on assets. 
D) inventory turnover. 
A) acid-test ratio. 
B) current ratio. 
C) return on assets. 
D) inventory turnover.

Question 6

A vertical analysis of a balance sheet shows that current assets have increased from 42% to 56%.This means that:

Accepted Answer

A) current assets have increased as a percentage of total assets. 
B) the dollar amount of total assets has increased. 
C) the dollar amount of total assets has decreased. 
D) the dollar amount of long-term assets has increased. 
A) current assets have increased as a percentage of total assets. 
B) the dollar amount of total assets has increased. 
C) the dollar amount of total assets has decreased. 
D) the dollar amount of long-term assets has increased.

Question 7

The financial statements are the responsibility of ________,and the responsibility of the ________ is to express an opinion on the financial statements based on the audit.

Accepted Answer

A) auditor,management 
B) SEC,auditor 
C) management,SEC 
D) management,auditor 
A) auditor,management 
B) SEC,auditor 
C) management,SEC 
D) management,auditor

Question 8

A company's debt ratio is computed as total assets minus total liabilities divided by total assets.

Accepted Answer

A) True 
 B)False

Question 9

Goelzer Company reports the following trend percentages for net income:   Given the above data,which statement is FALSE assuming 2015 is the base year?

Accepted Answer

A) When compared to 2017,net income is falling in 2018. 
B) Net income is increasing in 2016 and 2017. 
C) Net income is lower in 2019 than in 2015. 
D) Net income is higher in 2019 than in 2015. 
A) When compared to 2017,net income is falling in 2018. 
B) Net income is increasing in 2016 and 2017. 
C) Net income is lower in 2019 than in 2015. 
D) Net income is higher in 2019 than in 2015.

Question 10

On a common-size income statement,income taxes expense is expressed as a percentage of:

Accepted Answer

A) net income. 
B) total stockholders' equity. 
C) total assets. 
D) net sales. 
A) net income. 
B) total stockholders' equity. 
C) total assets. 
D) net sales.

Question 11

The percentage change in a financial statement line item over two years is computed by dividing the dollar amount of the line item in the most recent year by the prior year dollar amount of the line item.

Accepted Answer

A) True 
 B)False

Question 12

In 2018,the Zenon Company reported that property,plant and equipment were equal to 12% of total assets.In 2018,current assets were equal to 88% of total assets.In 2019 the company reported that property,plant and equipment were equal to 28% of total assets.In 2019,current assets were equal to 72% of total assets.What conclusion can be reached from this information?

Accepted Answer

A) In 2019,the company is downsizing. 
B) In 2019,property,plant and equipment as a proportion of total assets increased. 
C) In 2019,the company is investing in the future. 
D) B and C. 
A) In 2019,the company is downsizing. 
B) In 2019,property,plant and equipment as a proportion of total assets increased. 
C) In 2019,the company is investing in the future. 
D) B and C.

Question 13

How is the percentage change (for horizontal analysis)for sales from 2018 to 2019 computed?

Accepted Answer

A) Year 2019 sales ÷ Year 2018 sales 
B) (Year 2019 sales - Year 2018 sales)÷ Year 2018 sales 
C) (Year 2019 sales - Year 2018 sales)÷ Year 2019 sales 
D) (Year 2019 sales ÷ Year 2018 sales)× 100 
A) Year 2019 sales ÷ Year 2018 sales 
B) (Year 2019 sales - Year 2018 sales)÷ Year 2018 sales 
C) (Year 2019 sales - Year 2018 sales)÷ Year 2019 sales 
D) (Year 2019 sales ÷ Year 2018 sales)× 100

Question 14

Nekich Company reports the following sales figures(in millions):   What is the trend percentage in 2020 if 2015 is the base year? (Round your final answer to the nearest whole percentage)

Accepted Answer

A) 92% 
B) 88% 
C) 85% 
D) 96% 
A) 92% 
B) 88% 
C) 85% 
D) 96%

Question 15

After verifying information on the financials by an independent auditor,the auditor issues an "opinion on the ________ of presentation of the financial statements."

Accepted Answer

A) verification 
B) validation 
C) fairness 
D) properness 
A) verification 
B) validation 
C) fairness 
D) properness

Question 16

An annual report is filed by every public company with the:

Accepted Answer

A) FASB. 
B) SEC. 
C) U.S.Treasury department. 
D) An annual report is not filed. 
A) FASB. 
B) SEC. 
C) U.S.Treasury department. 
D) An annual report is not filed.

Question 17

What is accounts payable turnover?

Accepted Answer

A) A ratio calculated as Purchases divided by ending balance in Accounts Payable. 
B) A ratio calculated as Cost of Goods Sold divided by average Accounts Payable. 
C) A ratio calculated as Purchases divided by average Accounts Payable. 
D) B and C. 
A) A ratio calculated as Purchases divided by ending balance in Accounts Payable. 
B) A ratio calculated as Cost of Goods Sold divided by average Accounts Payable. 
C) A ratio calculated as Purchases divided by average Accounts Payable. 
D) B and C.

Question 18

Vertical analysis compares a line item on the balance sheet,in a current period,to the same line item on the balance sheet in a prior period.

Accepted Answer

A) True 
 B)False

Question 19

American Furniture Company has an accounts receivable turnover ratio of 20 while the industry average is 10.What can be said about American Furniture Company's accounts receivable turnover ratio?

Accepted Answer

A) American Furniture Company collects accounts receivable slower than the industry average. 
B) American Furniture Company collects accounts receivable faster than the industry average. 
C) American Furniture Company may have a credit policy that is too lenient in granting credit to new customers. 
D) American Furniture Company may have a lax credit department. 
A) American Furniture Company collects accounts receivable slower than the industry average. 
B) American Furniture Company collects accounts receivable faster than the industry average. 
C) American Furniture Company may have a credit policy that is too lenient in granting credit to new customers. 
D) American Furniture Company may have a lax credit department.

Question 20

Horizontal analysis is most closely related to:

Accepted Answer

A) trend analysis. 
B) current ratio. 
C) vertical analysis. 
D) benchmarking. 
A) trend analysis. 
B) current ratio. 
C) vertical analysis. 
D) benchmarking.

How is the trend percentage for sales in 2019 computed? The base year is 2012.

Every public company's annual report filed begins with the income statement.

On a common-size balance sheet,each line item is expressed as a percentage of:

For the period from 2019 to 2020,a company reports the following: If sales are $8,000,000 in 2019,what are sales in 2020?

Ratios that test liquidity include all of the following EXCEPT:

A vertical analysis of a balance sheet shows that current assets have increased from 42% to 56%.This means that:

The financial statements are the responsibility of ,and the responsibility of the is to express an opinion on the financial statements based on the audit.

A company's debt ratio is computed as total assets minus total liabilities divided by total assets.

Goelzer Company reports the following trend percentages for net income: Given the above data,which statement is FALSE assuming 2015 is the base year?

On a common-size income statement,income taxes expense is expressed as a percentage of:

The percentage change in a financial statement line item over two years is computed by dividing the dollar amount of the line item in the most recent year by the prior year dollar amount of the line item.

How is the percentage change (for horizontal analysis)for sales from 2018 to 2019 computed?

Nekich Company reports the following sales figures(in millions): What is the trend percentage in 2020 if 2015 is the base year? (Round your final answer to the nearest whole percentage)

After verifying information on the financials by an independent auditor,the auditor issues an "opinion on the ________ of presentation of the financial statements."

An annual report is filed by every public company with the:

What is accounts payable turnover?

Vertical analysis compares a line item on the balance sheet,in a current period,to the same line item on the balance sheet in a prior period.

American Furniture Company has an accounts receivable turnover ratio of 20 while the industry average is 10.What can be said about American Furniture Company's accounts receivable turnover ratio?

Horizontal analysis is most closely related to:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Investments

Time Value of Money

Filters

Exam 12: Financial Statement Analysis

How is the trend percentage for sales in 2019 computed? The base year is 2012.

Every public company's annual report filed begins with the income statement.

On a common-size balance sheet,each line item is expressed as a percentage of:

For the period from 2019 to 2020,a company reports the following: If sales are $8,000,000 in 2019,what are sales in 2020?

Ratios that test liquidity include all of the following EXCEPT:

A vertical analysis of a balance sheet shows that current assets have increased from 42% to 56%.This means that:

The financial statements are the responsibility of ________,and the responsibility of the ________ is to express an opinion on the financial statements based on the audit.

A company's debt ratio is computed as total assets minus total liabilities divided by total assets.

Goelzer Company reports the following trend percentages for net income: Given the above data,which statement is FALSE assuming 2015 is the base year?

On a common-size income statement,income taxes expense is expressed as a percentage of:

The percentage change in a financial statement line item over two years is computed by dividing the dollar amount of the line item in the most recent year by the prior year dollar amount of the line item.

How is the percentage change (for horizontal analysis)for sales from 2018 to 2019 computed?

Nekich Company reports the following sales figures(in millions): What is the trend percentage in 2020 if 2015 is the base year? (Round your final answer to the nearest whole percentage)

After verifying information on the financials by an independent auditor,the auditor issues an "opinion on the ________ of presentation of the financial statements."

An annual report is filed by every public company with the:

What is accounts payable turnover?

Vertical analysis compares a line item on the balance sheet,in a current period,to the same line item on the balance sheet in a prior period.

American Furniture Company has an accounts receivable turnover ratio of 20 while the industry average is 10.What can be said about American Furniture Company's accounts receivable turnover ratio?

Horizontal analysis is most closely related to:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Investments

Time Value of Money

Filters

The financial statements are the responsibility of ,and the responsibility of the is to express an opinion on the financial statements based on the audit.