Question 1

A company reports the following:   Determine the company's earnings per share on common stock.

Accepted Answer

A)  $7.50 
B)  $7.00 
C)  $8.00 
D)  $35.00 
A)  $7.50 
B)  $7.00 
C)  $8.00 
D)  $35.00

Question 2

Which of the following is required by the Sarbanes-Oxley Act of 2002?

Accepted Answer

A)  A price-earnings ratio. 
B)  A report on internal control. 
C)  A vertical analysis. 
D)  A common-sized statement. 
A)  A price-earnings ratio. 
B)  A report on internal control. 
C)  A vertical analysis. 
D)  A common-sized statement.

Question 3

An extraordinary item must be either unusual in nature or infrequent in occurrence.

Accepted Answer

A) True 
 B)False

Question 4

The following items are reported on a company's balance sheet:
   Required:
Determine (1) the current ratio and (2) the quick ratio. Round to one decimal place.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 5

The following information was taken from the financial statement of Fox Resources for December 31 of the current fiscal year:
  The net income was $600,000 and the declared dividends on the common stock were $125,000 for the current year. The market price of the common stock is $20 per share.
Required:
Calculate for the common stock:
(1) earnings per share
(2) the price-earnings ratio
(3) the dividends per share and the dividend yield.
Round to one decimal place except earnings per share, which should be rounded to two decimal places.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 6

A financial statement showing each item on the statement as a percentage of one key item on the statement is called common-sized financial statements.

Accepted Answer

A) True 
 B)False

Question 7

In performing a vertical analysis, the base for cost of goods sold is

Accepted Answer

A)  total selling expenses. 
B)  net sales. 
C)  total expenses. 
D)  gross profit. 
A)  total selling expenses. 
B)  net sales. 
C)  total expenses. 
D)  gross profit.

Question 8

Assuming that the quantities of inventory on hand during the current year were sufficient to meet all demands for sales, a decrease in the inventory turnover for the current year when compared with the turnover for the preceding year indicates an improvement in inventory management.

Accepted Answer

A) True 
 B)False

Question 9

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

Accepted Answer

A) True 
 B)False

Question 10

When the rate of return on total assets ratio is greater than the rate of return on common stockholders' equity ratio, the management of the company has effectively used leverage.

Accepted Answer

A) True 
 B)False

Question 11

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 12

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 13

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

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Why would you compare or not compare Coca-Cola and Pepsi-Cola (PepsiCo) as companies to each other?

Accepted Answer

Coca-Cola has maintained its focus on th

Question 16

Using measures to assess a business's ability to pay its current liabilities is called current position analysis.

Accepted Answer

A) True 
 B)False

Question 17

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 dividend yield for this company? Round your answer to one decimal point.

Accepted Answer

A)  4.5% 
B)  9.0% 
C)  16.6% 
D)  22.2% 
A)  4.5% 
B)  9.0% 
C)  16.6% 
D)  22.2%

Question 18

Those unusual items reported as deductions from income from continuing operations should be listed net of the related income tax.

Accepted Answer

A) True 
 B)False

Question 19

The numerator of the rate earned on common stockholders' equity ratio is equal to

Accepted Answer

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

Question 20

Match between columns
                        Premises: Occurs when a company abandons a segment.
This requires a restatement of prior period financial statements.
Focuses on a company’s ability to generate net income
The percentage analysis of the relationship of each component in a financial statement to a total within the statement.
Something that is both unusual and infrequent.
A percentage analysis of increases and decreases in related items in comparative financial statements.
Useful for comparing one company to another or a company with industry averages
An analysis of a company’s ability to pay its current liabilities.

Accepted Answer

The Answer of Horizontal analysis and Profitability analysis and Common-sized is...

A company reports the following: Determine the company's earnings per share on common stock.

Which of the following is required by the Sarbanes-Oxley Act of 2002?

An extraordinary item must be either unusual in nature or infrequent in occurrence.

The following items are reported on a company's balance sheet: Required: Determine (1) the current ratio and (2) the quick ratio. Round to one decimal place.

A financial statement showing each item on the statement as a percentage of one key item on the statement is called common-sized financial statements.

In performing a vertical analysis, the base for cost of goods sold is

Assuming that the quantities of inventory on hand during the current year were sufficient to meet all demands for sales, a decrease in the inventory turnover for the current year when compared with the turnover for the preceding year indicates an improvement in inventory management.

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

When the rate of return on total assets ratio is greater than the rate of return on common stockholders' equity ratio, the management of the company has effectively used leverage.

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

The numerator used to calculate accounts receivable turnover is

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

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

Why would you compare or not compare Coca-Cola and Pepsi-Cola (PepsiCo) as companies to each other?

Using measures to assess a business's ability to pay its current liabilities is called current position analysis.

Those unusual items reported as deductions from income from continuing operations should be listed net of the related income tax.

The numerator of the rate earned on common stockholders' equity ratio is equal to

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

A company reports the following: Determine the company's earnings per share on common stock.

Which of the following is required by the Sarbanes-Oxley Act of 2002?

An extraordinary item must be either unusual in nature or infrequent in occurrence.

The following items are reported on a company's balance sheet: Required: Determine (1) the current ratio and (2) the quick ratio. Round to one decimal place.

A financial statement showing each item on the statement as a percentage of one key item on the statement is called common-sized financial statements.

In performing a vertical analysis, the base for cost of goods sold is

Assuming that the quantities of inventory on hand during the current year were sufficient to meet all demands for sales, a decrease in the inventory turnover for the current year when compared with the turnover for the preceding year indicates an improvement in inventory management.

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

When the rate of return on total assets ratio is greater than the rate of return on common stockholders' equity ratio, the management of the company has effectively used leverage.

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

The numerator used to calculate accounts receivable turnover is

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

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

Why would you compare or not compare Coca-Cola and Pepsi-Cola (PepsiCo) as companies to each other?

Using measures to assess a business's ability to pay its current liabilities is called current position analysis.

Those unusual items reported as deductions from income from continuing operations should be listed net of the related income tax.

The numerator of the rate earned on common stockholders' equity ratio is equal to

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