Question 1

Issuing common stock will decrease a company's financial leverage.

Accepted Answer

A) True 
 B)False

Question 2

When computing the return on total assets,the interest expense is added back to net income to show what earnings would have been if the company had no debt.

Accepted Answer

A) True 
 B)False

Question 3

A company's current ratio and an acid-test ratio are both greater than 1.Payment of an account payable would:

Accepted Answer

A) increase the current ratio but the acid-test ratio would not be affected. 
B) increase the acid-test ratio but the current ratio would not be affected. 
C) increase both the current and acid-test ratios. 
D) decrease both the current and acid-test ratios. 
A) increase the current ratio but the acid-test ratio would not be affected. 
B) increase the acid-test ratio but the current ratio would not be affected. 
C) increase both the current and acid-test ratios. 
D) decrease both the current and acid-test ratios.

Question 4

Accounts receivable turnover will normally decrease as a result of:

Accepted Answer

A) the write-off of an uncollectible account against the allowance for bad debts. 
B) a significant sales volume decrease near the end of the accounting period. 
C) an increase in cash sales in proportion to credit sales. 
D) a change in credit policy to lengthen the period for cash discounts. 
A) the write-off of an uncollectible account against the allowance for bad debts. 
B) a significant sales volume decrease near the end of the accounting period. 
C) an increase in cash sales in proportion to credit sales. 
D) a change in credit policy to lengthen the period for cash discounts.

Question 5

If the acid-test ratio is less than one,then paying off some current liabilities with cash will increase the acid-test (quick)ratio.

Accepted Answer

A) True 
 B)False

Question 6

Mayfield Corporation has provided the following financial data:   The company's current ratio is closest to:

Accepted Answer

A) 0.26 
B) 2.65 
C) 0.50 
D) 0.53 
A) 0.26 
B) 2.65 
C) 0.50 
D) 0.53

Question 7

Data from Dunshee Corporation's most recent balance sheet appear below:   Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730. The average sale period for Year 2 is closest to:

Accepted Answer

A) 28.1 days 
B) 45.0 days 
C) 50.0 days 
D) 227.7 days 
A) 28.1 days 
B) 45.0 days 
C) 50.0 days 
D) 227.7 days

Question 8

As the accounts receivable turnover ratio decreases,the average collection period increases.

Accepted Answer

A) True 
 B)False

Question 9

Fraction Corporation has provided the following financial data:   Required:
a.What is the company's times interest earned for Year 2?
b.What is the company's debt-to-equity ratio at the end of Year 2?
c.What is the company's equity multiplier at the end of Year 2?

Accepted Answer

a.Times interest earned = Net operating

Question 10

Uhri Corporation has provided the following data:   Dividends on common stock during Year 2 totaled $4,000.The market price of common stock at the end of Year 2 was $6.08 per share.The company's dividend payout ratio for Year 2 is closest to:

Accepted Answer

A) 7.8% 
B) 1.3% 
C) 11.1% 
D) 0.8% 
A) 7.8% 
B) 1.3% 
C) 11.1% 
D) 0.8%

Question 11

Data from Yochem Corporation's most recent balance sheet appear below:   Required:
Compute the company's acid-test ratio.Show your work!

Accepted Answer

Acid-test ratio = Quick assets* ÷ Curren

Question 12

Spincic Corporation has provided the following data:   The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

Accepted Answer

A) 0.52 
B) 8.10 
C) 6.16 
D) 12.52 
A) 0.52 
B) 8.10 
C) 6.16 
D) 12.52

Question 13

Financial statements for Narstad Corporation appear below:     Narstad Corporation's times interest earned for Year 2 was closest to:

Accepted Answer

A) 11.0 
B) 10.0 
C) 18.0 
D) 7.0 
A) 11.0 
B) 10.0 
C) 18.0 
D) 7.0

Question 14

Financial statements for Maraby Corporation appear below:     Maraby Corporation's working capital (in thousands of dollars)at the end of Year 2 was closest to:

Accepted Answer

A) $260 
B) $620 
C) $360 
D) $990 
A) $260 
B) $620 
C) $360 
D) $990

Question 15

The gross margin percentage is computed by dividing sales by the gross margin.

Accepted Answer

A) True 
 B)False

Question 16

The times interest earned ratio is based on net income because that is the amount of earnings that is available for making interest payments.Interest expense is deducted before taxes are determined;creditors have first claim on the earnings before taxes are paid.

Accepted Answer

A) True 
 B)False

Question 17

Freiman Corporation's most recent balance sheet and income statement appear below:     The inventory turnover for Year 2 is closest to:

Accepted Answer

A) 0.92 
B) 6.50 
C) 1.08 
D) 6.24 
A) 0.92 
B) 6.50 
C) 1.08 
D) 6.24

Question 18

Lindboe Corporation has provided the following financial data:     Dividends on common stock during Year 2 totaled $4,800.The market price of common stock at the end of Year 2 was $5.46 per share.
Required:
a.What is the company's times interest earned for Year 2?
b.What is the company's debt-to-equity ratio at the end of Year 2?
c.What is the company's equity multiplier at the end of Year 2?
d.What is the company's net profit margin percentage for Year 2?
e.What is the company's gross margin percentage for Year 2?
f.What is the company's return on total assets for Year 2?
g.What is the company's return on equity for Year 2?

Accepted Answer

a.Times interest earned = Net operating

Question 19

Frantic Corporation had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The corporation's accounts receivable turnover was closest to:

Accepted Answer

A) 5.00 
B) 13.00 
C) 10.00 
D) 8.13 
A) 5.00 
B) 13.00 
C) 10.00 
D) 8.13

Question 20

Perrett Corporation has provided the following financial data:   Required:
a.What is the company's net profit margin percentage for Year 2?
b.What is the company's gross margin percentage for Year 2?
c.What is the company's return on total assets for Year 2?
d.What is the company's return on equity for Year 2?

Accepted Answer

a.Net profit margin percentage = Net inc

Issuing common stock will decrease a company's financial leverage.

When computing the return on total assets,the interest expense is added back to net income to show what earnings would have been if the company had no debt.

A company's current ratio and an acid-test ratio are both greater than 1.Payment of an account payable would:

Accounts receivable turnover will normally decrease as a result of:

If the acid-test ratio is less than one,then paying off some current liabilities with cash will increase the acid-test (quick)ratio.

Mayfield Corporation has provided the following financial data: The company's current ratio is closest to:

Data from Dunshee Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730. The average sale period for Year 2 is closest to:

As the accounts receivable turnover ratio decreases,the average collection period increases.

Fraction Corporation has provided the following financial data: Required: a.What is the company's times interest earned for Year 2? b.What is the company's debt-to-equity ratio at the end of Year 2? c.What is the company's equity multiplier at the end of Year 2?

Uhri Corporation has provided the following data: Dividends on common stock during Year 2 totaled $4,000.The market price of common stock at the end of Year 2 was $6.08 per share.The company's dividend payout ratio for Year 2 is closest to:

Data from Yochem Corporation's most recent balance sheet appear below: Required: Compute the company's acid-test ratio.Show your work!

Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

Financial statements for Narstad Corporation appear below: Narstad Corporation's times interest earned for Year 2 was closest to:

Financial statements for Maraby Corporation appear below: Maraby Corporation's working capital (in thousands of dollars)at the end of Year 2 was closest to:

The gross margin percentage is computed by dividing sales by the gross margin.

The times interest earned ratio is based on net income because that is the amount of earnings that is available for making interest payments.Interest expense is deducted before taxes are determined;creditors have first claim on the earnings before taxes are paid.

Freiman Corporation's most recent balance sheet and income statement appear below: The inventory turnover for Year 2 is closest to:

Frantic Corporation had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The corporation's accounts receivable turnover was closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Flexible Budgets and Performance Analysis

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters

Exam 14: Capital Budgeting Decisions

Issuing common stock will decrease a company's financial leverage.

When computing the return on total assets,the interest expense is added back to net income to show what earnings would have been if the company had no debt.

A company's current ratio and an acid-test ratio are both greater than 1.Payment of an account payable would:

Accounts receivable turnover will normally decrease as a result of:

If the acid-test ratio is less than one,then paying off some current liabilities with cash will increase the acid-test (quick)ratio.

Mayfield Corporation has provided the following financial data: The company's current ratio is closest to:

Data from Dunshee Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730. The average sale period for Year 2 is closest to:

As the accounts receivable turnover ratio decreases,the average collection period increases.

Fraction Corporation has provided the following financial data: Required: a.What is the company's times interest earned for Year 2? b.What is the company's debt-to-equity ratio at the end of Year 2? c.What is the company's equity multiplier at the end of Year 2?

Uhri Corporation has provided the following data: Dividends on common stock during Year 2 totaled $4,000.The market price of common stock at the end of Year 2 was $6.08 per share.The company's dividend payout ratio for Year 2 is closest to:

Data from Yochem Corporation's most recent balance sheet appear below: Required: Compute the company's acid-test ratio.Show your work!

Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

Financial statements for Narstad Corporation appear below: Narstad Corporation's times interest earned for Year 2 was closest to:

Financial statements for Maraby Corporation appear below: Maraby Corporation's working capital (in thousands of dollars)at the end of Year 2 was closest to:

The gross margin percentage is computed by dividing sales by the gross margin.

The times interest earned ratio is based on net income because that is the amount of earnings that is available for making interest payments.Interest expense is deducted before taxes are determined;creditors have first claim on the earnings before taxes are paid.

Freiman Corporation's most recent balance sheet and income statement appear below: The inventory turnover for Year 2 is closest to:

Frantic Corporation had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The corporation's accounts receivable turnover was closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Flexible Budgets and Performance Analysis

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters