Question 1

Which of the following is not included in the computation of the quick ratio?

Accepted Answer

A)  inventory 
B)  marketable securities 
C)  accounts receivable 
D)  cash 
A)  inventory 
B)  marketable securities 
C)  accounts receivable 
D)  cash

Question 2

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Accepted Answer

A) True 
 B)False

Question 3

The balance sheets at the end of each of the first two years of operations indicate the following:   If net income is $115,000 and interest expense is $30,000 for 2012, and the market price is $30, What is the price-earnings ratio on common stock for 2012 (Round intermediate calculation to two decimal place and final answers to one decimal place)?

Accepted Answer

A)  16.9 
B)  12.1 
C)  14.4 
D)  13.3 
A)  16.9 
B)  12.1 
C)  14.4 
D)  13.3

Question 4

Factors which reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as solvency and profitability.

Accepted Answer

A) True 
 B)False

Question 5

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

Accepted Answer

A) True 
 B)False

Question 6

An extraordinary item results from

Accepted Answer

A)  a segment of the business being sold. 
B)  corporate income tax being paid. 
C)  a change from one accounting method to another acceptable accounting method. 
D)  a transaction or event that is unusual and occurs infrequently. 
A)  a segment of the business being sold. 
B)  corporate income tax being paid. 
C)  a change from one accounting method to another acceptable accounting method. 
D)  a transaction or event that is unusual and occurs infrequently.

Question 7

Horizontal analysis of comparative financial statements includes the

Accepted Answer

A)  development of common size statements. 
B)  calculation of liquidity ratios. 
C)  calculation of dollar amount changes and percentage changes from the previous to the current year. 
D)  the evaluation of each component in a financial statement to a total within the statement. 
A)  development of common size statements. 
B)  calculation of liquidity ratios. 
C)  calculation of dollar amount changes and percentage changes from the previous to the current year. 
D)  the evaluation of each component in a financial statement to a total within the statement.

Question 8

In a common size income statement, the 100% figure is:

Accepted Answer

A)  net cost of goods sold. 
B)  net income. 
C)  gross profit. 
D)  net sales. 
A)  net cost of goods sold. 
B)  net income. 
C)  gross profit. 
D)  net sales.

Question 9

The number of days' sales in receivables is one means of expressing the relationship between average daily sales and accounts receivable.

Accepted Answer

A) True 
 B)False

Question 10

Dollar amounts of working capital are difficult to assess when comparing companies of different sizes or in comparing such amounts with industry figures.

Accepted Answer

A) True 
 B)False

Question 11

Vertical analysis refers to comparing the financial statements of a single company for several years.

Accepted Answer

A) True 
 B)False

Question 12

The following data are taken from the financial statements:

Accepted Answer

(a)
 @#IMG-DLM&_TB20

Question 13

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 14

A company can use comparisons of its financial data to the data of other companies and industry values to evaluate its position.

Accepted Answer

A) True 
 B)False

Question 15

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
  Liabilities and Stockholders' Equity
  Income Statement
    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 16

Horizontal analysis is a technique for evaluating financial statement data

Accepted Answer

A)  for one period of time. 
B)  over a period of time. 
C)  on a certain date. 
D)  as it may appear in the future. 
A)  for one period of time. 
B)  over a period of time. 
C)  on a certain date. 
D)  as it may appear in the future.

Question 17

The relationship of $325,000 to $125,000, expressed as a ratio, is

Accepted Answer

A)  2.0 to 1 
B)  2.6 to 1 
C)  2.5 to 1 
D)  0.45 to 1 
A)  2.0 to 1 
B)  2.6 to 1 
C)  2.5 to 1 
D)  0.45 to 1

Question 18

A company reports the following:
   Determine the (a) accounts receivable turnover, and (b) number of days' sales in receivables. Round your answer to one decimal place.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 19

Short-term creditors are typically most interested in assessing

Accepted Answer

A)  marketability. 
B)  profitability. 
C)  operating results. 
D)  solvency. 
A)  marketability. 
B)  profitability. 
C)  operating results. 
D)  solvency.

Question 20

The Cash and Accounts Receivable for a company are provided below:
   Based on this information, what is the amount and percentage of increase or decrease that would be shown in a balance sheet with horizontal analysis?

Accepted Answer

@#IMG-DLM&_TB2085_00

Which of the following is not included in the computation of the quick ratio?

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Factors which reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as solvency and profitability.

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

An extraordinary item results from

Horizontal analysis of comparative financial statements includes the

In a common size income statement, the 100% figure is:

The number of days' sales in receivables is one means of expressing the relationship between average daily sales and accounts receivable.

Dollar amounts of working capital are difficult to assess when comparing companies of different sizes or in comparing such amounts with industry figures.

Vertical analysis refers to comparing the financial statements of a single company for several years.

The following data are taken from the financial statements:

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

A company can use comparisons of its financial data to the data of other companies and industry values to evaluate its position.

Horizontal analysis is a technique for evaluating financial statement data

The relationship of $325,000 to $125,000, expressed as a ratio, is

A company reports the following: Determine the (a) accounts receivable turnover, and (b) number of days' sales in receivables. Round your answer to one decimal place.

Short-term creditors are typically most interested in assessing

The Cash and Accounts Receivable for a company are provided below: Based on this information, what is the amount and percentage of increase or decrease that would be shown in a balance sheet with horizontal analysis?

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

Which of the following is not included in the computation of the quick ratio?

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Factors which reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as solvency and profitability.

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

An extraordinary item results from

Horizontal analysis of comparative financial statements includes the

In a common size income statement, the 100% figure is:

The number of days' sales in receivables is one means of expressing the relationship between average daily sales and accounts receivable.

Dollar amounts of working capital are difficult to assess when comparing companies of different sizes or in comparing such amounts with industry figures.

Vertical analysis refers to comparing the financial statements of a single company for several years.

The following data are taken from the financial statements:

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

A company can use comparisons of its financial data to the data of other companies and industry values to evaluate its position.

Horizontal analysis is a technique for evaluating financial statement data

The relationship of $325,000 to $125,000, expressed as a ratio, is

A company reports the following: Determine the (a) accounts receivable turnover, and (b) number of days' sales in receivables. Round your answer to one decimal place.

Short-term creditors are typically most interested in assessing

The Cash and Accounts Receivable for a company are provided below: Based on this information, what is the amount and percentage of increase or decrease that would be shown in a balance sheet with horizontal analysis?

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