Question 1

Which of the following types of items would you be most likely to see below the income tax expense line on an income statement prepared in 2014?

Accepted Answer

A) Gain on Sale of Discontinued Operations,Net of Tax 
B) Gross Profit 
C) Cumulative Effect of Accounting Change 
D) Salaries Expense 
A) Gain on Sale of Discontinued Operations,Net of Tax 
B) Gross Profit 
C) Cumulative Effect of Accounting Change 
D) Salaries Expense A

Question 2

Use the information above to answer the following question.Which of the following is closest to the company's earnings per share for the current year?

Accepted Answer

A) $10.00 
B) $20.00 
C) $7.25 
D) $7.50 
A) $10.00 
B) $20.00 
C) $7.25 
D) $7.50 D

Question 3

On a common size balance sheet,the percentage that should be shown for current assets is closest to

Accepted Answer

A) 100% 
B) 44% 
C) 30% 
D) 33% 
A) 100% 
B) 44% 
C) 30% 
D) 33% B

Question 4

Solvency ratio data are primarily concerned with the ability of a company to:

Accepted Answer

A) produce profits. 
B) handle its debt. 
C) manage its cash flow. 
D) provide income for stockholders. 
A) produce profits. 
B) handle its debt. 
C) manage its cash flow. 
D) provide income for stockholders.

Question 5

Which of the following ratios is used to evaluate solvency?

Accepted Answer

A) Earnings per share. 
B) Fixed asset turnover. 
C) Debt-to-assets. 
D) Quick ratio. 
A) Earnings per share. 
B) Fixed asset turnover. 
C) Debt-to-assets. 
D) Quick ratio.

Question 6

The asset turnover ratio is a profitability ratio.

Accepted Answer

A) True 
 B)False

Question 7

A condensed balance sheet for Liu Company is presented below:   
A.Prepare a vertical analysis of the balance sheet above.Round to the nearest whole percent.
B.Interpret your analysis.Identify significant items.Comment on key relationships.

Accepted Answer

A. @#IMG-DLM& B.Liu has a large portion of its ass

Question 8

Which of the following measures would assist in assessing the profitability of a company?

Accepted Answer

A) Asset turnover. 
B) Times interest earned ratio. 
C) Inventory turnover ratio. 
D) Debt to assets ratio. 
A) Asset turnover. 
B) Times interest earned ratio. 
C) Inventory turnover ratio. 
D) Debt to assets ratio.

Question 9

Significant differences between GAAP and IFRS exist in all of the following areas except:

Accepted Answer

A) classification of preferred stock. 
B) allowability of LIFO for inventory costing. 
C) depreciation of equipment. 
D) the order in which current and noncurrent accounts are presented on the balance sheet. 
A) classification of preferred stock. 
B) allowability of LIFO for inventory costing. 
C) depreciation of equipment. 
D) the order in which current and noncurrent accounts are presented on the balance sheet.

Question 10

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The gross profit percentage is closest to:

Accepted Answer

A) 32%. 
B) 56%. 
C) 86%. 
D) 14%. 
A) 32%. 
B) 56%. 
C) 86%. 
D) 14%.

Question 11

On a common size income statement for this year,what is the percentage that would be shown for cost of goods sold?

Accepted Answer

A) 76% 
B) 24% 
C) 31% 
D) 18% 
A) 76% 
B) 24% 
C) 31% 
D) 18%

Question 12

Use the information above to answer the following question.Which of the following is closest to the company's current ratio for 2015?

Accepted Answer

A) 2.22 
B) 2.26 
C) 2.57 
D) 6.0 
A) 2.22 
B) 2.26 
C) 2.57 
D) 6.0

Question 13

Which of the following statements regarding the effects of a business decision on a financial ratio is true?

Accepted Answer

A) If a company is expanding its facilities,its fixed asset turnover ratio is likely to fall temporarily. 
B) If a company extends its payment period for customers,its accounts receivable ratio is likely to rise. 
C) If a company eases its credit granting policies,its days to collect ratio is likely to fall. 
D) If a company builds up inventories,its days to sell ratio is likely to fall. 
A) If a company is expanding its facilities,its fixed asset turnover ratio is likely to fall temporarily. 
B) If a company extends its payment period for customers,its accounts receivable ratio is likely to rise. 
C) If a company eases its credit granting policies,its days to collect ratio is likely to fall. 
D) If a company builds up inventories,its days to sell ratio is likely to fall.

Question 14

Which of the following is closest to the company's debt-to-assets ratio for 2014?

Accepted Answer

A) 0.39 
B) 0.61 
C) 0.35 
D) 0 
A) 0.39 
B) 0.61 
C) 0.35 
D) 0

Question 15

Which of the following nonfinancial factors is most likely to be a cause of a going-concern problem?

Accepted Answer

A) Hiring a new CEO. 
B) Loss of a key patent. 
C) Announcing a new stock issue. 
D) Replacing an old product line. 
A) Hiring a new CEO. 
B) Loss of a key patent. 
C) Announcing a new stock issue. 
D) Replacing an old product line.

Question 16

Choose the appropriate letter to match the term and the definition.Not all definitions will be used.
Term
_______ Time-series analysis
_______ Common-size financial statements
_______ Management discussion and analysis
_______ P/E ratio
_______ Earnings per share
_______ Comprehensive income
_______ Discontinued operations
_______ Net income
Definition
A)The practice of reporting accounting data in the national monetary unit.
B)A nonrecurring item associated with abandoning or selling an operation.
C)The earnings of a company after taxes.
D)An increase in an asset or a decrease in a liability that results from peripheral activities.
E)After-tax earnings adjusted for gains and losses that may disappear before they are realized.
F)A section of the annual report that can be used in interpreting the results of financial statement analysis.
G)The ratio calculated by dividing the net income by the number of common shares outstanding.
H)The ratio calculated by dividing the price of a share of stock by the earnings per share.
I)Also known as ratio analysis.
J)A nonrecurring item on the income statement that reflects gains and losses associated with extraordinary events.
K)Another name for a trend analysis.
L)The practice of reporting information in percentages rather than monetary amounts.

Accepted Answer

The answer of Choose the appropriate letter to match the...

Question 17

Nonrecurring items such as a loss from discontinued operations is reported on the income statement:

Accepted Answer

A) net of income tax. 
B) before income tax expense. 
C) below the net income line. 
D) Nonrecurring items are not subject to income taxes;therefore,they are not reported on the income statement. 
A) net of income tax. 
B) before income tax expense. 
C) below the net income line. 
D) Nonrecurring items are not subject to income taxes;therefore,they are not reported on the income statement.

Question 18

Benchmarks are required to evaluate a company's performance.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following ratios is calculated by dividing liquid assets by current liabilities?

Accepted Answer

A) Current ratio. 
B) Quick ratio. 
C) Turnover ratio. 
D) Working capital ratio. 
A) Current ratio. 
B) Quick ratio. 
C) Turnover ratio. 
D) Working capital ratio.

Question 20

Which of the following is calculated by dividing cost of goods sold by average inventory and then dividing this result into 365 days?

Accepted Answer

A) Inventory turnover. 
B) Current ratio. 
C) Days to collect ratio. 
D) Days to sell ratio. 
A) Inventory turnover. 
B) Current ratio. 
C) Days to collect ratio. 
D) Days to sell ratio.

Which of the following types of items would you be most likely to see below the income tax expense line on an income statement prepared in 2014?

Use the information above to answer the following question.Which of the following is closest to the company's earnings per share for the current year?

On a common size balance sheet,the percentage that should be shown for current assets is closest to

Solvency ratio data are primarily concerned with the ability of a company to:

Which of the following ratios is used to evaluate solvency?

The asset turnover ratio is a profitability ratio.

A condensed balance sheet for Liu Company is presented below: A.Prepare a vertical analysis of the balance sheet above.Round to the nearest whole percent. B.Interpret your analysis.Identify significant items.Comment on key relationships.

Which of the following measures would assist in assessing the profitability of a company?

Significant differences between GAAP and IFRS exist in all of the following areas except:

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The gross profit percentage is closest to:

On a common size income statement for this year,what is the percentage that would be shown for cost of goods sold?

Use the information above to answer the following question.Which of the following is closest to the company's current ratio for 2015?

Which of the following statements regarding the effects of a business decision on a financial ratio is true?

Which of the following is closest to the company's debt-to-assets ratio for 2014?

Which of the following nonfinancial factors is most likely to be a cause of a going-concern problem?

Nonrecurring items such as a loss from discontinued operations is reported on the income statement:

Benchmarks are required to evaluate a company's performance.

Which of the following ratios is calculated by dividing liquid assets by current liabilities?

Which of the following is calculated by dividing cost of goods sold by average inventory and then dividing this result into 365 days?

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control, Cash, and Merchandise Sales

Inventories and Cost of Goods Sold

Receivables, Bad Debt Expense, and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Filters

Exam 13: Measuring and Evaluating Financial Performance

Which of the following types of items would you be most likely to see below the income tax expense line on an income statement prepared in 2014?

Use the information above to answer the following question.Which of the following is closest to the company's earnings per share for the current year?

On a common size balance sheet,the percentage that should be shown for current assets is closest to

Solvency ratio data are primarily concerned with the ability of a company to:

Which of the following ratios is used to evaluate solvency?

The asset turnover ratio is a profitability ratio.

A condensed balance sheet for Liu Company is presented below: A.Prepare a vertical analysis of the balance sheet above.Round to the nearest whole percent. B.Interpret your analysis.Identify significant items.Comment on key relationships.

Which of the following measures would assist in assessing the profitability of a company?

Significant differences between GAAP and IFRS exist in all of the following areas except:

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The gross profit percentage is closest to:

On a common size income statement for this year,what is the percentage that would be shown for cost of goods sold?

Use the information above to answer the following question.Which of the following is closest to the company's current ratio for 2015?

Which of the following statements regarding the effects of a business decision on a financial ratio is true?

Which of the following is closest to the company's debt-to-assets ratio for 2014?

Which of the following nonfinancial factors is most likely to be a cause of a going-concern problem?

Nonrecurring items such as a loss from discontinued operations is reported on the income statement:

Benchmarks are required to evaluate a company's performance.

Which of the following ratios is calculated by dividing liquid assets by current liabilities?

Which of the following is calculated by dividing cost of goods sold by average inventory and then dividing this result into 365 days?

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control, Cash, and Merchandise Sales

Inventories and Cost of Goods Sold

Receivables, Bad Debt Expense, and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Filters