Question 1

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:

Accepted Answer

A) .0785%. 
B) 7.85%. 
C) 12.73%. 
D) 1273%. 
E) 7850%. 
A) .0785%. 
B) 7.85%. 
C) 12.73%. 
D) 1273%. 
E) 7850%. B

Question 2

In horizontal analysis the percent change is computed by:

Accepted Answer

A) Subtracting the analysis period amount from the base period amount. 
B) Subtracting the base period amount from the analysis period amount. 
C) Subtracting the analysis period amount from the base period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
D) Subtracting the base period amount from the analysis period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis amount,then dividing the result by the analysis period amount. 
A) Subtracting the analysis period amount from the base period amount. 
B) Subtracting the base period amount from the analysis period amount. 
C) Subtracting the analysis period amount from the base period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
D) Subtracting the base period amount from the analysis period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis amount,then dividing the result by the analysis period amount. D

Question 3

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

Accepted Answer

A) True 
 B)False  False

Question 4

Refer to the following selected financial information from McCormik,LLC.Compute the company's days' sales uncollected for Year 2.

Accepted Answer

A) 43.9. 
B) 42.3. 
C) 46.2. 
D) 80.0. 
E) 113.3. 
A) 43.9. 
B) 42.3. 
C) 46.2. 
D) 80.0. 
E) 113.3.

Question 5

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in both dollar amounts and percentages,are referred to as:

Accepted Answer

A) Period-to-period statements. 
B) Controlling statements. 
C) Successive statements. 
D) Comparative statements. 
E) Serial statements. 
A) Period-to-period statements. 
B) Controlling statements. 
C) Successive statements. 
D) Comparative statements. 
E) Serial statements.

Question 6

The comparative balance sheet for Silverlight Co.is shown below.Express the balance sheet in common-size percentages.

Accepted Answer

The answer of The comparative balance sheet for Silverlight Co.is...

Question 7

Guidelines (rules-of-thumb)are general standards of comparison developed from:

Accepted Answer

A) Industry statistics from the government. 
B) Past experience. 
C) Analysis of competitors. 
D) Relations between financial items. 
E) Dun and Bradstreet. 
A) Industry statistics from the government. 
B) Past experience. 
C) Analysis of competitors. 
D) Relations between financial items. 
E) Dun and Bradstreet.

Question 8

When a company's activities include income-related events not part of normal,continuing operations,the complete income statement could potentially have the following sections:

Accepted Answer

A) Items from continuing operations and earnings per share for a corporation. 
B) Income or loss from operating a discontinued segment for the current period. 
C) The loss from disposing of the discontinued segment's net assets. 
D) Extraordinary items. 
E) Continuing operations,discontinued segments,extraordinary items,changes in accounting principles,and earnings per share for a corporation. 
A) Items from continuing operations and earnings per share for a corporation. 
B) Income or loss from operating a discontinued segment for the current period. 
C) The loss from disposing of the discontinued segment's net assets. 
D) Extraordinary items. 
E) Continuing operations,discontinued segments,extraordinary items,changes in accounting principles,and earnings per share for a corporation.

Question 9

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750.The Inventory turnover ratio is:

Accepted Answer

A) 0.5 times. 
B) 418 times. 
C) 20 times. 
D) 56 times. 
E) 19 times. 
A) 0.5 times. 
B) 418 times. 
C) 20 times. 
D) 56 times. 
E) 19 times.

Question 10

Financial statement analysis involves all of the following except:

Accepted Answer

A) The application of analytical tools to general-purpose financial statements and related data for making business decisions. 
B) Transforming accounting data into useful information for decision-making. 
C) Helping users to make better decisions. 
D) Helping to reduce uncertainty in decision-making. 
E) Assuring that the company will be more profitable in the future. 
A) The application of analytical tools to general-purpose financial statements and related data for making business decisions. 
B) Transforming accounting data into useful information for decision-making. 
C) Helping users to make better decisions. 
D) Helping to reduce uncertainty in decision-making. 
E) Assuring that the company will be more profitable in the future.

Question 11

A company's calendar-year financial data are shown below.The company had total assets of $339,000 and total equity of $144,400 for the prior year.No additional shares of common stock were issued during the year.The December 31 market price per share is $49.50.Cash dividends of $19,500 were paid during the year.Calculate the following ratios for the company:
(a)debt ratio
(b)equity ratio
(c)debt-to-equity ratio
(d)times interest earned
(e)total asset turnover

Accepted Answer

The answer of A company's calendar-year financial data are shown...

Question 12

Refer to the following selected financial information from Graphics,Inc.Compute the company's times interest earned.

Accepted Answer

A) 6.2. 
B) 2.5. 
C) 8.7. 
D) 9.7. 
E) 3.7. 
A) 6.2. 
B) 2.5. 
C) 8.7. 
D) 9.7. 
E) 3.7.

Question 13

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

Accepted Answer

A) True 
 B)False

Question 14

Martinez Corporation reported Net sales of $765,000 and Net income of $142,000.The Profit margin is:

Accepted Answer

A) 539.0%. 
B) 5.39%. 
C) 81.4%. 
D) 1.86%. 
E) 18.56%. 
A) 539.0%. 
B) 5.39%. 
C) 81.4%. 
D) 1.86%. 
E) 18.56%.

Question 15

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Accepted Answer

A) True 
 B)False

Question 16

In order to be classified as an extraordinary gain or loss,the item must be both (1)_______________ and (2)____________.

Accepted Answer

unusual ;infrequent

Question 17

Powers Company reported Net sales of $1,200,000 and Accounts Receivable,net of $78,500.The Day's sales uncollected (rounded to whole days)is:

Accepted Answer

A) 24 days. 
B) 15 days. 
C) 4 days. 
D) 56 days. 
E) 48 days. 
A) 24 days. 
B) 15 days. 
C) 4 days. 
D) 56 days. 
E) 48 days.

Question 18

The four building blocks of financial analysis are (1)_____________, (2)____________, (3)____________,and (4)_________________.

Accepted Answer

liquidity and efficiency ;solv

Question 19

Refer to the following selected financial information from Frankle Corp.Compute the company's working capital.

Accepted Answer

A) $536,650. 
B) $230,200. 
C) $568,200. 
D) $198,650. 
E) $231,450. 
A) $536,650. 
B) $230,200. 
C) $568,200. 
D) $198,650. 
E) $231,450.

Question 20

The building blocks of financial statement analysis include (1)liquidity, (2)salability, (3)solvency,and (4)profitability.

Accepted Answer

A) True 
 B)False

Exam 17: Analysis of Financial Statements

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:

In horizontal analysis the percent change is computed by:

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

Refer to the following selected financial information from McCormik,LLC.Compute the company's days' sales uncollected for Year 2.

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in both dollar amounts and percentages,are referred to as:

The comparative balance sheet for Silverlight Co.is shown below.Express the balance sheet in common-size percentages.

Guidelines (rules-of-thumb)are general standards of comparison developed from:

When a company's activities include income-related events not part of normal,continuing operations,the complete income statement could potentially have the following sections:

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750.The Inventory turnover ratio is:

Financial statement analysis involves all of the following except:

Refer to the following selected financial information from Graphics,Inc.Compute the company's times interest earned.

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

Martinez Corporation reported Net sales of $765,000 and Net income of $142,000.The Profit margin is:

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

In order to be classified as an extraordinary gain or loss,the item must be both (1)_______________ and (2)____________.

Powers Company reported Net sales of $1,200,000 and Accounts Receivable,net of $78,500.The Day's sales uncollected (rounded to whole days)is:

The four building blocks of financial analysis are (1)_____________, (2)____________, (3)____________,and (4)_________________.

Refer to the following selected financial information from Frankle Corp.Compute the company's working capital.

The building blocks of financial statement analysis include (1)liquidity, (2)salability, (3)solvency,and (4)profitability.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

Filters

In order to be classified as an extraordinary gain or loss,the item must be both (1)___ and (2).

The four building blocks of financial analysis are (1)_, (2), (3),and (4)_____.