Question 1

An organization that provides ratings of corporate governance services is:

Accepted Answer

A) SEC. 
B) ISS. 
C) IRS. 
D) IBM. 
A) SEC. 
B) ISS. 
C) IRS. 
D) IBM.

Question 2

[The following information applies to the questions displayed below.]
Given below are comparative balance sheets and an income statement for Eleva Corporation.
     All sales were made on account.Cash dividends declared during the year totaled $22,984.
-Eleva Corporation's operating cycle (in days)for 2018 is:

Accepted Answer

A) 158.8 days. 
B) 122.0 days. 
C) 213.4 days. 
D) 188.0 days. 
A) 158.8 days. 
B) 122.0 days. 
C) 213.4 days. 
D) 188.0 days.

Question 3

Effects of transactions upon analytical measurements
Determine the immediate effect of each of the transactions described below on the ratio listed beside each transaction.In the blank space to the left of each statement,you are to indicate the effect by writing the appropriate code letter.The code letters are as follows: I = increase the ratio,D = decrease the ratio,and NE = no effect on this ratio.

Accepted Answer

The answer of Effects of transactions upon analytical measurements
Determine the...

Question 4

Net income stated as a percentage of sales is one means of evaluating a company's ability to control its expenses.

Accepted Answer

A) True 
 B)False

Question 5

A company should carry the amount of working capital necessary to conduct operations,not necessarily maximize its working capital.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is considered a quick asset?

Accepted Answer

A) Accounts receivable. 
B) Inventory. 
C) Automobiles. 
D) Prepaid expenses. 
A) Accounts receivable. 
B) Inventory. 
C) Automobiles. 
D) Prepaid expenses.

Question 7

A company cannot be increasing its market share if its net sales are declining.

Accepted Answer

A) True 
 B)False

Question 8

Financial ratios
Shown below are some key figures from the balance sheets of Minuteman Gas Company for two successive years:
   Dividends of $96,000 were declared and paid in 2018.Compute the following:

Accepted Answer

The answer of Financial ratios
Shown below are some key figures...

Question 9

Current ratio and working capital
The balance sheet of Red Missile Company contained the following items,among others:
   (a)From the above information compute:
(1)Current assets: $________
(2)Current liabilities: $________
(3)The current ratio: ________ to 1
(4)Working capital: $________
(b)Assume that Red Missile Company pays the note payable of $163,000,thus reducing cash to $17,000.Compute the following after the completion of this transaction:
(1)The current ratio: ________ to 1
(2)Working capital: $________

Accepted Answer

The answer of Current ratio and working capital
The balance sheet...

Question 10

[The following information applies to the questions displayed below.]
Given below are comparative balance sheets and an income statement for Eleva Corporation.
     All sales were made on account.Cash dividends declared during the year totaled $22,984.
-Eleva Corporation's accounts receivable turnover for 2018 is closest to:

Accepted Answer

A) 4.63 times. 
B) 2.91 times. 
C) 5.42 times. 
D) 68 days. 
A) 4.63 times. 
B) 2.91 times. 
C) 5.42 times. 
D) 68 days.

Question 11

[The following information applies to the questions displayed below.]
Given below are comparative balance sheets and an income statement for Eleva Corporation.
     All sales were made on account.Cash dividends declared during the year totaled $22,984.
-Eleva Corporation's days to sell the average inventory for 2018 is:

Accepted Answer

A) 91.5 days. 
B) 67.3 days. 
C) 94.0 days. 
D) 125.4 days. 
A) 91.5 days. 
B) 67.3 days. 
C) 94.0 days. 
D) 125.4 days.

Question 12

In evaluating the quality of a company's earnings,which of the following factors is least important?

Accepted Answer

A) The accounting methods used by management 
B) The trend of the company's earnings over a period of years 
C) The dollar amount of earnings per share 
D) The stability and sources of the company's earnings 
A) The accounting methods used by management 
B) The trend of the company's earnings over a period of years 
C) The dollar amount of earnings per share 
D) The stability and sources of the company's earnings

Question 13

200 Working capital equals:

Accepted Answer

A) $560,000. 
B) $530,000. 
C) $270,000. 
D) $900,000. 
A) $560,000. 
B) $530,000. 
C) $270,000. 
D) $900,000.

Question 14

Current assets are those assets that can be converted into cash within:

Accepted Answer

A) One year and never longer. 
B) One year or the operating cycle,whichever is longer. 
C) One year or the operating cycle,whichever is shorter. 
D) Management's discretion. 
A) One year and never longer. 
B) One year or the operating cycle,whichever is longer. 
C) One year or the operating cycle,whichever is shorter. 
D) Management's discretion.

Question 15

[The following information applies to the questions displayed below.]
Given below are comparative balance sheets and an income statement for Claret Corporation.
       All sales were made on account.Cash dividends declared during the year totaled $11,492.
-Claret Corporation's return on assets for 2018 rounded to the nearest tenth of a percent is:

Accepted Answer

A) 10.0%. 
B) 4.1%. 
C) 5.9%. 
D) 16.9%. 
A) 10.0%. 
B) 4.1%. 
C) 5.9%. 
D) 16.9%.

Question 16

The current ratio will be ________ the quick ratio.

Accepted Answer

A) Less than 
B) Greater than or equal to 
C) The same as 
D) Always different than 
A) Less than 
B) Greater than or equal to 
C) The same as 
D) Always different than

Question 17

The Plaza Company has working capital of $540,000 and a current ratio of 3 to 1.The amount of current assets is:

Accepted Answer

A) $405,000. 
B) $540,000. 
C) $810,000. 
D) $270,000. 
A) $405,000. 
B) $540,000. 
C) $810,000. 
D) $270,000.

Question 18

From a creditor's point of view,the lower the debt ratio;the safer the creditor's position.

Accepted Answer

A) True 
 B)False

Question 19

In a multiple-step income statement,interest expense usually is not classified as an operating expense because interest charges:

Accepted Answer

A) Do not contribute to the production of revenue. 
B) Stem from the manner in which assets are financed,not the manner in which they are used in business operations. 
C) Relate directly to the cost of goods sold. 
D) The statement is incorrect.Interest usually is classified as an operating expense. 
A) Do not contribute to the production of revenue. 
B) Stem from the manner in which assets are financed,not the manner in which they are used in business operations. 
C) Relate directly to the cost of goods sold. 
D) The statement is incorrect.Interest usually is classified as an operating expense.

Question 20

[The following information applies to the questions displayed below.]
Given below are comparative balance sheets and an income statement for Namekagon Corporation.
  
-Namekagon Corporation's interest coverage ratio for 2018 is:

Accepted Answer

A) 1.45. 
B) 1.69. 
C) 2.45. 
D) 4.92. 
A) 1.45. 
B) 1.69. 
C) 2.45. 
D) 4.92.

Exam 14: Financial Statement Analysis

An organization that provides ratings of corporate governance services is:

Net income stated as a percentage of sales is one means of evaluating a company's ability to control its expenses.

A company should carry the amount of working capital necessary to conduct operations,not necessarily maximize its working capital.

Which of the following is considered a quick asset?

A company cannot be increasing its market share if its net sales are declining.

Financial ratios Shown below are some key figures from the balance sheets of Minuteman Gas Company for two successive years: Dividends of $96,000 were declared and paid in 2018.Compute the following:

In evaluating the quality of a company's earnings,which of the following factors is least important?

200 Working capital equals:

Current assets are those assets that can be converted into cash within:

The current ratio will be ________ the quick ratio.

The Plaza Company has working capital of $540,000 and a current ratio of 3 to 1.The amount of current assets is:

From a creditor's point of view,the lower the debt ratio;the safer the creditor's position.

In a multiple-step income statement,interest expense usually is not classified as an operating expense because interest charges:

[The following information applies to the questions displayed below.] Given below are comparative balance sheets and an income statement for Namekagon Corporation. -Namekagon Corporation's interest coverage ratio for 2018 is:

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Global Business and Accounting

Management Accounting

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters