Question 1

A loss on disposal of a segment would be reported in the income statement as a(n)

Accepted Answer

A)  administrative expense 
B)  other expense 
C)  deduction from income from continuing operations 
D)  selling expense 
A)  administrative expense 
B)  other expense 
C)  deduction from income from continuing operations 
D)  selling expense

Question 2

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 price earnings ratio for this company? Round your answer to one decimal point.

Accepted Answer

A)  8.0 times 
B)  2.5 times 
C)  4.0 times 
D)  6.0 times 
A)  8.0 times 
B)  2.5 times 
C)  4.0 times 
D)  6.0 times

Question 3

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

Accepted Answer

A)  17.5 
B)  2.6 
C)  20.0 
D)  15.5 
A)  17.5 
B)  2.6 
C)  20.0 
D)  15.5

Question 4

If a company has issued only one class of stock, the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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 7

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 8

Define solvency and profitability. How are they alike?

Accepted Answer

Solvency is the ability of a company to

Question 9

Which of the following items should be classified as an extraordinary item on a corporate income statement?

Accepted Answer

A)  gain on the retirement of a bond payable 
B)  loss from land condemned for public use 
C)  loss due to an discontinued operation 
D)  selling treasury stock for more than the company paid for it 
A)  gain on the retirement of a bond payable 
B)  loss from land condemned for public use 
C)  loss due to an discontinued operation 
D)  selling treasury stock for more than the company paid for it

Question 10

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 as

Question 11

The following information is available for Dorman Company:   Which of the following statements is correct?

Accepted Answer

A)  The dividend yield is 6.0%, which is of interest to investors seeking an increase in market price of their stocks. 
B)  The dividend yield is 6.0%, which is of special interest to investors seeking to earn revenue on their investments. 
C)  The dividend yield is 16.7%, which is of interest to bondholders. 
D)  The dividend yield is 16.7% which is an important measure of solvency. 
A)  The dividend yield is 6.0%, which is of interest to investors seeking an increase in market price of their stocks. 
B)  The dividend yield is 6.0%, which is of special interest to investors seeking to earn revenue on their investments. 
C)  The dividend yield is 16.7%, which is of interest to bondholders. 
D)  The dividend yield is 16.7% which is an important measure of solvency.

Question 12

A company with $70,000 in current assets and $50,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

Accepted Answer

A)  both decrease. 
B)  both increase. 
C)  increase and remain the same, respectively. 
D)  remain the same and decrease, respectively. 
A)  both decrease. 
B)  both increase. 
C)  increase and remain the same, respectively. 
D)  remain the same and decrease, respectively.

Question 13

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 14

A common measure of liquidity is

Accepted Answer

A)  ratio of net sales to assets. 
B)  dividends per share of common stock. 
C)  receivable turnover. 
D)  profit margin. 
A)  ratio of net sales to assets. 
B)  dividends per share of common stock. 
C)  receivable turnover. 
D)  profit margin.

Question 15

All of the following are typically included in the Management's Discussion and Analysis in annual reports except:

Accepted Answer

A)  explanations of any significant changes between the current and prior years' financial statements. 
B)  management's assessment of liquidity. 
C)  journal entries. 
D)  off-balance-sheet arrangements 
A)  explanations of any significant changes between the current and prior years' financial statements. 
B)  management's assessment of liquidity. 
C)  journal entries. 
D)  off-balance-sheet arrangements

Question 16

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 17

Comparing dividends per share to earnings per share indicates the extent to which the corporation is retaining its earnings for use in operations.

Accepted Answer

A) True 
 B)False

Question 18

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 19

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 20

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

Accepted Answer

(1)
Young Technologies Inc.
Co

Exam 17: Financial Statement Analysis

A loss on disposal of a segment would be reported in the income statement as a(n)

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 price earnings ratio for this company? Round your answer to one decimal point.

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

If a company has issued only one class of stock, the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding.

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

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.

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

Define solvency and profitability. How are they alike?

Which of the following items should be classified as an extraordinary item on a corporate income statement?

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

The following information is available for Dorman Company: Which of the following statements is correct?

A company with $70,000 in current assets and $50,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

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

A common measure of liquidity is

All of the following are typically included in the Management's Discussion and Analysis in annual reports except:

Short-term creditors are typically most interested in assessing

Comparing dividends per share to earnings per share indicates the extent to which the corporation is retaining its earnings for use in operations.

The numerator used to calculate accounts receivable turnover is

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

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

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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