Question 1

Current position analysis indicates a company's ability to liquidate current liabilities.

Accepted Answer

A) True 
 B)False

Question 2

Earnings per share amounts are only required to be presented for income from continuing operations and net income on the face of the statement.

Accepted Answer

A) True 
 B)False

Question 3

Unusual items affecting the prior period's income statement consist of errors and change in accounting principles.

Accepted Answer

A) True 
 B)False

Question 4

The numerator used to calculate accounts receivable turnover is

Accepted Answer

A)  total sales 
B)  net sales 
C)  accounts receivable at year-end 
D)  average accounts receivable 
A)  total sales 
B)  net sales 
C)  accounts receivable at year-end 
D)  average accounts receivable

Question 5

The following items were taken from the financial statements of Stanton, Inc., over a three-year period:
   Compute the following for each of the above time periods.
   Round percentage to one decimal place.

Accepted Answer

The answer of The following items were taken from the...

Question 6

Interpreting financial analysis should be considered in light of conditions peculiar to the industry and the general economic conditions.

Accepted Answer

A) True 
 B)False

Question 7

In computing the rate earned on total assets, interest expense is subtracted from net income before dividing by average total assets.

Accepted Answer

A) True 
 B)False

Question 8

The numerator of the rate earned on total assets ratio is equal to

Accepted Answer

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

Question 9

The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets
  What is the ratio of net sales to total assets for this company? Round your answer to two decimal points.

Accepted Answer

A)  1.00 
B)  1.89 
C)  0.36 
D)  0.29 
A)  1.00 
B)  1.89 
C)  0.36 
D)  0.29

Question 10

Revenue and expense data for Young Technologies are as follows:
  
 Required:

Accepted Answer

(1)
Young Technologies Inc.
Co

Question 11

Ratios and various other analytical measures are  not a substitute for sound judgment, nor do they provide definitive guides for action.

Accepted Answer

A) True 
 B)False

Question 12

The percentage analysis of increases and decreases in corresponding items in comparative financial statements is referred to as horizontal analysis.

Accepted Answer

A) True 
 B)False

Question 13

Based on the above data, what is the quick ratio, rounded to one decimal point?

Accepted Answer

A)  2.7 
B)  2.6 
C)  1.7 
D)  0.9 
A)  2.7 
B)  2.6 
C)  1.7 
D)  0.9

Question 14

Under which of the following cases may a percentage change be computed?

Accepted Answer

A)  There is no amount in the base year. 
B)  There is a negative amount in the base year and a negative amount in the subsequent year. 
C)  The trend of the amounts is decreasing but all amounts are positive. 
D)  There is a negative amount in the base year and a positive amount in the subsequent year. 
A)  There is no amount in the base year. 
B)  There is a negative amount in the base year and a negative amount in the subsequent year. 
C)  The trend of the amounts is decreasing but all amounts are positive. 
D)  There is a negative amount in the base year and a positive amount in the subsequent year.

Question 15

Which of the following would appear as an extraordinary item on the income statement?

Accepted Answer

A)  loss resulting from the sale of fixed assets 
B)  gain resulting from the disposal of a segment of the business 
C)  loss from land condemned for public use 
D)  liquidating dividend 
A)  loss resulting from the sale of fixed assets 
B)  gain resulting from the disposal of a segment of the business 
C)  loss from land condemned for public use 
D)  liquidating dividend

Question 16

For Garrison Corporation, the working capital at the end of the current year is $10,000 more than the working capital at the end of the preceding year, reported as follows:
  
 Required:
Has the current position improved? Explain.

Accepted Answer

The amount of working capital and the ch

Question 17

The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on total assets is sometimes referred to as

Accepted Answer

A)  leverage 
B)  solvency 
C)  yield 
D)  quick assets 
A)  leverage 
B)  solvency 
C)  yield 
D)  quick assets

Question 18

Reporting unusual items separately on the income statement allows investors to isolate the effects of these items on income and cash flows.

Accepted Answer

A) True 
 B)False

Question 19

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 20

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

Exam 15: Financial Statement Analysis

Current position analysis indicates a company's ability to liquidate current liabilities.

Earnings per share amounts are only required to be presented for income from continuing operations and net income on the face of the statement.

Unusual items affecting the prior period's income statement consist of errors and change in accounting principles.

The numerator used to calculate accounts receivable turnover is

The following items were taken from the financial statements of Stanton, Inc., over a three-year period: Compute the following for each of the above time periods. Round percentage to one decimal place.

Interpreting financial analysis should be considered in light of conditions peculiar to the industry and the general economic conditions.

In computing the rate earned on total assets, interest expense is subtracted from net income before dividing by average total assets.

The numerator of the rate earned on total assets ratio is equal to

The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets What is the ratio of net sales to total assets for this company? Round your answer to two decimal points.

Revenue and expense data for Young Technologies are as follows: Required:

Ratios and various other analytical measures are not a substitute for sound judgment, nor do they provide definitive guides for action.

The percentage analysis of increases and decreases in corresponding items in comparative financial statements is referred to as horizontal analysis.

Based on the above data, what is the quick ratio, rounded to one decimal point?

Under which of the following cases may a percentage change be computed?

Which of the following would appear as an extraordinary item on the income statement?

For Garrison Corporation, the working capital at the end of the current year is $10,000 more than the working capital at the end of the preceding year, reported as follows: Required: Has the current position improved? Explain.

The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on total assets is sometimes referred to as

Reporting unusual items separately on the income statement allows investors to isolate the effects of these items on income and cash flows.

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

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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