Question 1

The ______________ ratio measures the percentage of earnings distributed in the form of cash dividends.

Accepted Answer

The answer of The ______________ ratio measures the percentage of...

Question 2

The accounts receivable turnover is calculated by dividing ________________ by average ___________________.

Accepted Answer

net credit

Question 3

In performing a vertical analysis, the base for cost of goods sold is

Accepted Answer

A)  total selling expenses. 
B)  net sales. 
C)  total revenues. 
D)  total expenses. 
A)  total selling expenses. 
B)  net sales. 
C)  total revenues. 
D)  total expenses.

Question 4

Return on assets is most closely related to

Accepted Answer

A)  profit margin and debt to assets ratio. 
B)  profit margin and asset turnover. 
C)  times interest earned and debt to stockholders' equity. 
D)  profit margin and free cash flow. 
A)  profit margin and debt to assets ratio. 
B)  profit margin and asset turnover. 
C)  times interest earned and debt to stockholders' equity. 
D)  profit margin and free cash flow.

Question 5

In horizontal analysis, each item is expressed as a percentage of the

Accepted Answer

A)  net income amount. 
B)  stockholders' equity amount. 
C)  total assets amount. 
D)  base-year amount. 
A)  net income amount. 
B)  stockholders' equity amount. 
C)  total assets amount. 
D)  base-year amount.

Question 6

If the inventory turnover is 7.3 times, and the average inventory was $600,000, the cost of goods sold during the year was $______________ and the average days to sell the inventory was ______________ days.

Accepted Answer

The answer of If the inventory turnover is 7.3 times,...

Question 7

Lupton Inc. disposes of an unprofitable segment of its business. The operation of the segment suffered a $200,000 loss in the year of disposal. The loss on disposal of the segment was $100,000. If the tax rate is 30%, and income before income taxes was $1,600,000,

Accepted Answer

A)  the income tax expense on the income before discontinued operations is $390,000. 
B)  the income from continuing operations is $1,120,000. 
C)  net income is $1,300,000. 
D)  the losses from discontinued operations are reported net of income taxes at $300,000. 
A)  the income tax expense on the income before discontinued operations is $390,000. 
B)  the income from continuing operations is $1,120,000. 
C)  net income is $1,300,000. 
D)  the losses from discontinued operations are reported net of income taxes at $300,000.

Question 8

The current ratio would be of most interest to

Accepted Answer

A)  short-term creditors. 
B)  long-term creditors. 
C)  stockholders. 
D)  customers. 
A)  short-term creditors. 
B)  long-term creditors. 
C)  stockholders. 
D)  customers.

Question 9

A company has an accounts receivable turnover of 10. The average net accounts receivable during the period are $900,000. What is the amount of net credit sales for the period?

Accepted Answer

A)  $90,000 
B)  $9,000,000 
C)  $900,000 
D)  $990,000 
A)  $90,000 
B)  $9,000,000 
C)  $900,000 
D)  $990,000

Question 10

The following items were taken from the financial statements of St. Johns, Inc., over a four-year period:   
Instructions
Using horizontal analysis and 2015 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or unfavorable for each item.

Accepted Answer

@#IMG-DLM& The trend in net sales is increasing an

Question 11

The following ratios have been computed for Southern Company for 2017.   
The 2017 financial statements for Southern Company with missing information follows:   
   
Instructions
Use the above ratios and information from the Southern Company financial statements to fill in the missing information on the financial statements. Follow the sequence indicated. Show computations that support your answers.

Accepted Answer

@#IMG-DLM& (1) Net income = $40,000; ($200,000 × 2

Question 12

Reardon Inc. has an investment in trading securities of $140,000. This investment experienced an unrealized loss of $7,000 during the current year. Assuming a 35% tax rate, the effect of this loss on comprehensive income will be

Accepted Answer

A)  no effect. 
B)  $140,000 increase. 
C)  $49,000 decrease. 
D)  $91,000 decrease. 
A)  no effect. 
B)  $140,000 increase. 
C)  $49,000 decrease. 
D)  $91,000 decrease.

Question 13

Comparative balance sheets

Accepted Answer

A)  are usually prepared for at least one year. 
B)  are usually prepared for at least two years. 
C)  do not show both dollar amount and percentage changes. 
D)  do not show a comparison of total stockholders' equity. 
A)  are usually prepared for at least one year. 
B)  are usually prepared for at least two years. 
C)  do not show both dollar amount and percentage changes. 
D)  do not show a comparison of total stockholders' equity.

Question 14

Selected information from the comparative financial statements of Barcelona Company for the year ended December 31 appears below:   
Instructions
Answer the following questions relating to the year ended December 31, 2017. Show computations.
1. The inventory turnover for 2017 is __________.
2. The number of times interest earned in 2017 is __________.
3. The accounts receivable turnover for 2017 is __________.
4. The return on assets for 2017 is __________.

Accepted Answer

The answer of Selected information from the comparative financial statements...

Question 15

An income statement would not include

Accepted Answer

A)  other revenue and gains. 
B)  income from operations. 
C)  discontinued operations. 
D)  dividends paid. 
A)  other revenue and gains. 
B)  income from operations. 
C)  discontinued operations. 
D)  dividends paid.

Question 16

All revenue and expense items are considered ordinary in nature under

Accepted Answer

A)  both IFRS and GAAP. 
B)  GAAP. 
C)  IFRS. 
D)  neither IFRS or GAAP. 
A)  both IFRS and GAAP. 
B)  GAAP. 
C)  IFRS. 
D)  neither IFRS or GAAP.

Question 17

The current ratio is

Accepted Answer

A)  calculated by dividing current liabilities by current assets. 
B)  used to evaluate a company's liquidity and short-term debt paying ability. 
C)  used to evaluate a company's solvency and long-term debt paying ability. 
D)  calculated by subtracting current liabilities from current assets. 
A)  calculated by dividing current liabilities by current assets. 
B)  used to evaluate a company's liquidity and short-term debt paying ability. 
C)  used to evaluate a company's solvency and long-term debt paying ability. 
D)  calculated by subtracting current liabilities from current assets.

Question 18

The ratios that are used to determine a company's short-term debt paying ability are

Accepted Answer

A)  asset turnover, times interest earned, current ratio, and accounts receivables turnover. 
B)  times interest earned, inventory turnover, current ratio, and receivables turnover. 
C)  times interest earned, accounts receivable turnover ratio, current ratio, and inventory turnover. 
D)  current ratio, account receivable turnover, and inventory turnover. 
A)  asset turnover, times interest earned, current ratio, and accounts receivables turnover. 
B)  times interest earned, inventory turnover, current ratio, and receivables turnover. 
C)  times interest earned, accounts receivable turnover ratio, current ratio, and inventory turnover. 
D)  current ratio, account receivable turnover, and inventory turnover.

Question 19

The profit margin is calculated by dividing

Accepted Answer

A)  sales by cost of goods sold. 
B)  gross profit by net sales. 
C)  net income by stockholders' equity. 
D)  net income by net sales. 
A)  sales by cost of goods sold. 
B)  gross profit by net sales. 
C)  net income by stockholders' equity. 
D)  net income by net sales.

Question 20

A common measure of long-term solvency is

Accepted Answer

A)  the debt to assets ratio. 
B)  the current ratio. 
C)  the asset turnover. 
D)  inventory turnover. 
A)  the debt to assets ratio. 
B)  the current ratio. 
C)  the asset turnover. 
D)  inventory turnover.

Exam 13: Financial Statement Analysis

The ______________ ratio measures the percentage of earnings distributed in the form of cash dividends.

The accounts receivable turnover is calculated by dividing ________________ by average ___________________.

In performing a vertical analysis, the base for cost of goods sold is

Return on assets is most closely related to

In horizontal analysis, each item is expressed as a percentage of the

If the inventory turnover is 7.3 times, and the average inventory was $600,000, the cost of goods sold during the year was $______________ and the average days to sell the inventory was ______________ days.

Lupton Inc. disposes of an unprofitable segment of its business. The operation of the segment suffered a $200,000 loss in the year of disposal. The loss on disposal of the segment was $100,000. If the tax rate is 30%, and income before income taxes was $1,600,000,

The current ratio would be of most interest to

A company has an accounts receivable turnover of 10. The average net accounts receivable during the period are $900,000. What is the amount of net credit sales for the period?

Reardon Inc. has an investment in trading securities of $140,000. This investment experienced an unrealized loss of $7,000 during the current year. Assuming a 35% tax rate, the effect of this loss on comprehensive income will be

Comparative balance sheets

An income statement would not include

All revenue and expense items are considered ordinary in nature under

The current ratio is

The ratios that are used to determine a company's short-term debt paying ability are

The profit margin is calculated by dividing

A common measure of long-term solvency is

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations Perpetual Approach

Inventories Periodic Approach

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, and Stockholders Equity

Statement of Cash Flows

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Time Value of Money

Investments

Payroll Accounting

Subsidiary Ledgers and Special Journals

Other Significant Liabilities

Filters

The accounts receivable turnover is calculated by dividing by average ___.

If the inventory turnover is 7.3 times, and the average inventory was $600,000, the cost of goods sold during the year was $ and the average days to sell the inventory was days.