Question 1

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  True

Question 2

A balance sheet that displays only component percentages is called

Accepted Answer

A)  trend balance sheet 
B)  comparative balance sheet 
C)  condensed balance sheet 
D)  common-sized balance sheet 
A)  trend balance sheet 
B)  comparative balance sheet 
C)  condensed balance sheet 
D)  common-sized balance sheet D

Question 3

A company reports the following:
   Determine the ratio of net sales to total assets. Round your answer to one decimal place.

Accepted Answer

Ratio of net sales to total assets = Net sales / Average total assets
Ratio of net sales to total assets = $2,400,000 / 1,500,000
Ratio of net sales to total assets = 1.6

Question 4

Income statement information for Lucy Company is provided below:   Using vertical analysis of the income statement for Lucy Company, determine the gross profit margin.

Accepted Answer

A)  100% 
B)  70% 
C)  40% 
D)  60% 
A)  100% 
B)  70% 
C)  40% 
D)  60%

Question 5

What type of analysis is indicated by the following?

Accepted Answer

A)  vertical analysis 
B)  horizontal analysis 
C)  liquidity analysis 
D)  common-size analysis 
A)  vertical analysis 
B)  horizontal analysis 
C)  liquidity analysis 
D)  common-size analysis

Question 6

The following selected data were taken from the financial statements of the Berrol Group for December 31, 2012, 2011, and 2010: 
  The 2012 net income was $242,000 and the 2011 net income was $308,000. No dividends on common stock were declared between 2010 and 2012.
Required:
(1) Determine the rate earned on total assets, the rate earned on stockholders' equity, and the rate earned on common stockholders' equity for the years 2012 and 2011. Round to one decimal place.
(2) What conclusion can be drawn from these data as to the company's profitability?

Accepted Answer

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Question 7

From the following data for Norton Company for the year ended December 31, 2012 prepare a multiple-step income statement. Show parenthetically earnings per share for the following: income from continuing operations, loss on discontinued operations (less applicable income tax), income before extraordinary item, extraordinary item (less applicable income tax), and net income.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 8

Which one of the following is not a characteristic generally evaluated in ratio analysis?

Accepted Answer

A)  liquidity 
B)  profitability 
C)  solvency 
D)  marketability 
A)  liquidity 
B)  profitability 
C)  solvency 
D)  marketability

Question 9

Which of the following should be reported net of the related income tax effect on the income statement?

Accepted Answer

A)  sale of an inventory item at a loss 
B)  loss due to sale of fixed assets 
C)  loss due to a discontinued operations of the business 
D)  sale of a temporary investment at a loss 
A)  sale of an inventory item at a loss 
B)  loss due to sale of fixed assets 
C)  loss due to a discontinued operations of the business 
D)  sale of a temporary investment at a loss

Question 10

Income statement information for Sharif Corporation is provided below:
   Required: Prepare a vertical analysis of the given income statement information for Sharif Corporation.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 11

The percent of fixed assets to total assets is an example of

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 12

Hsu Company reported the following on its income statement:   An analysis of the income statement revealed that interest expense was $80,000. Hsu Company's times interest earned was

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 13

A clean audit opinion is the same as a qualified audit opinion.

Accepted Answer

A) True 
 B)False

Question 14

The independent auditor's report does which of the following?

Accepted Answer

A)  describes which financial statements are covered by the audit 
B)  gives the auditor's opinion regarding the fairness of the financial statements 
C)  summarizes what the auditor did 
D)  states that the financial statements were presented on time 
A)  describes which financial statements are covered by the audit 
B)  gives the auditor's opinion regarding the fairness of the financial statements 
C)  summarizes what the auditor did 
D)  states that the financial statements were presented on time

Question 15

The following information was taken from Slater Company's balance sheet:
   Determine the company's (a) Ratio of fixed assets to long-term liabilities, and (b) ratio of liabilities to stockholders' equity. Round your answer to one decimal place.

Accepted Answer

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Question 16

The particular analytical measures chosen to analyze a company may be influenced by all of the following except:

Accepted Answer

A)  industry type 
B)  capital structure 
C)  diversity of business operations 
D)  product quality or service effectiveness 
A)  industry type 
B)  capital structure 
C)  diversity of business operations 
D)  product quality or service effectiveness

Question 17

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 18

Based on the above data, what is the amount of quick assets?

Accepted Answer

A)  $168,000 
B)  $96,000 
C)  $60,000 
D)  $61,000 
A)  $168,000 
B)  $96,000 
C)  $60,000 
D)  $61,000

Question 19

The rate earned on total assets measures the profitability of total assets, without considering how the assets are financed.

Accepted Answer

A) True 
 B)False

Question 20

Based on the following data for the current year, what is the inventory turnover?

Accepted Answer

A)  2.7 
B)  9.7 
C)  2.5 
D)  3.0 
A)  2.7 
B)  9.7 
C)  2.5 
D)  3.0

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

A balance sheet that displays only component percentages is called

A company reports the following: Determine the ratio of net sales to total assets. Round your answer to one decimal place.

Income statement information for Lucy Company is provided below: Using vertical analysis of the income statement for Lucy Company, determine the gross profit margin.

What type of analysis is indicated by the following?

Which one of the following is not a characteristic generally evaluated in ratio analysis?

Which of the following should be reported net of the related income tax effect on the income statement?

Income statement information for Sharif Corporation is provided below: Required: Prepare a vertical analysis of the given income statement information for Sharif Corporation.

The percent of fixed assets to total assets is an example of

Hsu Company reported the following on its income statement: An analysis of the income statement revealed that interest expense was $80,000. Hsu Company's times interest earned was

A clean audit opinion is the same as a qualified audit opinion.

The independent auditor's report does which of the following?

The following information was taken from Slater Company's balance sheet: Determine the company's (a) Ratio of fixed assets to long-term liabilities, and (b) ratio of liabilities to stockholders' equity. Round your answer to one decimal place.

The particular analytical measures chosen to analyze a company may be influenced by all of the following except:

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.

Based on the above data, what is the amount of quick assets?

The rate earned on total assets measures the profitability of total assets, without considering how the assets are financed.

Based on the following data for the current year, what is the inventory turnover?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Filters

Exam 17: Financial Statement Analysis

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

A balance sheet that displays only component percentages is called

A company reports the following: Determine the ratio of net sales to total assets. Round your answer to one decimal place.

Income statement information for Lucy Company is provided below: Using vertical analysis of the income statement for Lucy Company, determine the gross profit margin.

What type of analysis is indicated by the following?

Which one of the following is not a characteristic generally evaluated in ratio analysis?

Which of the following should be reported net of the related income tax effect on the income statement?

Income statement information for Sharif Corporation is provided below: Required: Prepare a vertical analysis of the given income statement information for Sharif Corporation.

The percent of fixed assets to total assets is an example of

Hsu Company reported the following on its income statement: An analysis of the income statement revealed that interest expense was $80,000. Hsu Company's times interest earned was

A clean audit opinion is the same as a qualified audit opinion.

The independent auditor's report does which of the following?

The following information was taken from Slater Company's balance sheet: Determine the company's (a) Ratio of fixed assets to long-term liabilities, and (b) ratio of liabilities to stockholders' equity. Round your answer to one decimal place.

The particular analytical measures chosen to analyze a company may be influenced by all of the following except:

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.

Based on the above data, what is the amount of quick assets?

The rate earned on total assets measures the profitability of total assets, without considering how the assets are financed.

Based on the following data for the current year, what is the inventory turnover?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Filters