Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

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, what is the rate earned on stockholders' equity for 2012 (round percent to one decimal point)?

Accepted Answer

A)  10.6% 
B)  11.1% 
C)  12.4% 
D)  14.0% 
A)  10.6% 
B)  11.1% 
C)  12.4% 
D)  14.0%

Question 4

A company reports the following income statement and balance sheet information for the current year:
   Determine the rate earned on total assets. Round your answer to one decimal place.

Accepted Answer

Rate earned on total assets = (Net incom

Question 5

Corporate annual reports typically do not contain which of the following?

Accepted Answer

A)  management discussion and analysis 
B)  SEC statement expressing an opinion 
C)  accompanying foot notes 
D)  auditor's report 
A)  management discussion and analysis 
B)  SEC statement expressing an opinion 
C)  accompanying foot notes 
D)  auditor's report

Question 6

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

The answer of The Cash and Accounts Receivable for a...

Question 7

The following information pertains to Newman 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 price earnings ratio for this company?

Accepted Answer

A)  6.0 times 
B)  4.2 times 
C)  8.0 times 
D)  9.6 times 
A)  6.0 times 
B)  4.2 times 
C)  8.0 times 
D)  9.6 times

Question 8

A loss due to a discontinued operation should be reported in the income statement

Accepted Answer

A)  above income from continuing operations. 
B)  without related tax effect. 
C)  below income from continuing operations. 
D)  as an operating expense. 
A)  above income from continuing operations. 
B)  without related tax effect. 
C)  below income from continuing operations. 
D)  as an operating expense.

Question 9

A company reports the following:
   Determine the company's price-earnings ratio. Round your answer to one decimal place.

Accepted Answer

Price-earnings ratio = Market price per

Question 10

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&_TB2013_00

Question 11

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 12

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are

Accepted Answer

A)  a substitute for sound judgment. 
B)  useful analytical measures. 
C)  enough information for analysis, industry information is not needed. 
D)  unnecessary for analysis, but reaction is better. 
A)  a substitute for sound judgment. 
B)  useful analytical measures. 
C)  enough information for analysis, industry information is not needed. 
D)  unnecessary for analysis, but reaction is better.

Question 13

Match each item with its definition.

Accepted Answer

The answer of Match each item with its definition.
 ...

Question 14

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 15

The denominator of the rate of return on total assets ratio is the average total assets.

Accepted Answer

A) True 
 B)False

Question 16

A firm selling food should have higher inventory turnover rate than a firm selling office furniture.

Accepted Answer

A) True 
 B)False

Question 17

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 18

When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item before income from continuing operations on the income statement.

Accepted Answer

A) True 
 B)False

Question 19

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 20

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.    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

Exam 17: Financial Statement Analysis

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

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

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, what is the rate earned on stockholders' equity for 2012 (round percent to one decimal point)?

A company reports the following income statement and balance sheet information for the current year: Determine the rate earned on total assets. Round your answer to one decimal place.

Corporate annual reports typically do not contain which of the following?

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?

The following information pertains to Newman 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 price earnings ratio for this company?

A loss due to a discontinued operation should be reported in the income statement

A company reports the following: Determine the company's price-earnings ratio. Round your answer to one decimal place.

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.

Horizontal analysis is a technique for evaluating financial statement data

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are

Match each item with its definition.

The denominator of the rate of return on total assets ratio is the average total assets.

A firm selling food should have higher inventory turnover rate than a firm selling office furniture.

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

When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item before income from continuing operations on the income statement.

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

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. What is the ratio of net sales to total assets for this company? Round your answer to two decimal points.

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

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

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