Question 1

The debt-to-equity ratio measures the amount of financing provided by creditors relative to

Accepted Answer

A) equity earned from operations. 
B) equity provided by retained earnings. 
C) equity provided by owners. 
D) equity earned through dividends. 
A) equity earned from operations. 
B) equity provided by retained earnings. 
C) equity provided by owners. 
D) equity earned through dividends.

Question 2

Gant Wholesale Company has $2,000 in cash, $20,000 in accounts receivable, $34,000 in inventory, and $1,600 in prepaid expenses.Liabilities totaled $120,000, with $36,000 current and $84,000 long-term.What is Gant's current ratio?

Accepted Answer

($2,000 + $20,000 +

Question 3

The average days to sell inventory is calculated as

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 4

On a common-size income statement, selling expense is shown as a percentage of

Accepted Answer

A) net sales revenue. 
B) operating income. 
C) net income. 
D) gross profit. 
A) net sales revenue. 
B) operating income. 
C) net income. 
D) gross profit.

Question 5

Because an absolute dollar change does not give the whole picture, horizontal analysis generally includes which of the following?

Accepted Answer

A) Rational dollars 
B) Percentage changes 
C) Explanations 
D) Budget amounts 
A) Rational dollars 
B) Percentage changes 
C) Explanations 
D) Budget amounts

Question 6

In preparing a common-size income statement, you express all revenue and expense accounts as a percentage of net income.

Accepted Answer

A) True 
 B)False

Question 7

The following financial statement items are shown for J&T Manufacturing.   Calculate the common-size percentage for insurance expense.

Accepted Answer

A) 3.3% 
B) 5.8% 
C) 23.3% 
D) 50.0% 
A) 3.3% 
B) 5.8% 
C) 23.3% 
D) 50.0%

Question 8

Working capital is the difference between a firm's total assets and total liabilities.

Accepted Answer

A) True 
 B)False

Question 9

Three measures of liquidity are working capital, current ratio, and acid-test ratio.What do each of these measures show, and how are they each calculated?

Accepted Answer

Working capital measures a company's abi

Question 10

Which of the following is not a measure of liquidity?

Accepted Answer

A) Working capital 
B) Average collection period 
C) Acid-test 
D) Price-earnings ratio 
A) Working capital 
B) Average collection period 
C) Acid-test 
D) Price-earnings ratio

Question 11

The gross margin percentage shows how much of each sales dollar is available after which of the following income statement components has been covered?

Accepted Answer

A) Cost of goods sold 
B) Contribution margin 
C) Operating expenses 
D) Net income. 
A) Cost of goods sold 
B) Contribution margin 
C) Operating expenses 
D) Net income.

Question 12

Which of the following is not a component of common stockholders' equity?

Accepted Answer

A) Long-term debt 
B) Common stock 
C) Additional paid-in capital 
D) Retained earnings 
A) Long-term debt 
B) Common stock 
C) Additional paid-in capital 
D) Retained earnings

Question 13

The quality of assets is assessed through

Accepted Answer

A) turnover ratios. 
B) working capital. 
C) current ratio. 
D) profitability ratios. 
A) turnover ratios. 
B) working capital. 
C) current ratio. 
D) profitability ratios.

Question 14

In preparing a common-size balance sheet, you express all account balances as a percentage of

Accepted Answer

A) total stockholders' equity. 
B) total liabilities. 
C) total assets plus total liabilities minus stockholders' equity. 
D) total assets. 
A) total stockholders' equity. 
B) total liabilities. 
C) total assets plus total liabilities minus stockholders' equity. 
D) total assets.

Question 15

Gant Wholesale Company has $2,000 in cash, $7,000 in accounts receivable, $12,000 in inventory, and $3,000 in prepaid expenses.Liabilities totaled $20,000, with $6,000 current and $14,000 long-term.What is Gant's working capital?

Accepted Answer

$2,000 + $7,000 + $1

Question 16

Turbo Company's accounts receivable account balance was $100,000 at the beginning of the year and $120,000 at the end of the year.Turbo's percentage change calculation at the end of the current year is

Accepted Answer

A) 16.7% decrease. 
B) 16.7% increase. 
C) 20% decrease. 
D) 20% increase. 
A) 16.7% decrease. 
B) 16.7% increase. 
C) 20% decrease. 
D) 20% increase.

Question 17

Trend analysis is very useful for analyzing the financial statements, but not for analyzing supplemental information reported in corporate annual reports.

Accepted Answer

A) True 
 B)False

Question 18

Most companies use a combination of debt and equity to obtain the assets needed to fund their operations.Two leverage ratios are the debt ratio and the debt-to-equity ratio.What do each of these measures show, and how are they each calculated?

Accepted Answer

The debt ratio shows the proportion of a

Question 19

Foreman Outfitters, a retail store of camping supplies, has total assets of $170,000 and total liabilities of $70,000.What is Foreman's debt-to-equity ratio?

Accepted Answer

$70,000 ÷

Question 20

Land is the ultimate liquid asset.

Accepted Answer

A) True 
 B)False

The debt-to-equity ratio measures the amount of financing provided by creditors relative to

Gant Wholesale Company has $2,000 in cash, $20,000 in accounts receivable, $34,000 in inventory, and $1,600 in prepaid expenses.Liabilities totaled $120,000, with $36,000 current and $84,000 long-term.What is Gant's current ratio?

The average days to sell inventory is calculated as

On a common-size income statement, selling expense is shown as a percentage of

Because an absolute dollar change does not give the whole picture, horizontal analysis generally includes which of the following?

In preparing a common-size income statement, you express all revenue and expense accounts as a percentage of net income.

The following financial statement items are shown for J&T Manufacturing. Calculate the common-size percentage for insurance expense.

Working capital is the difference between a firm's total assets and total liabilities.

Three measures of liquidity are working capital, current ratio, and acid-test ratio.What do each of these measures show, and how are they each calculated?

Which of the following is not a measure of liquidity?

The gross margin percentage shows how much of each sales dollar is available after which of the following income statement components has been covered?

Which of the following is not a component of common stockholders' equity?

The quality of assets is assessed through

In preparing a common-size balance sheet, you express all account balances as a percentage of

Gant Wholesale Company has $2,000 in cash, $7,000 in accounts receivable, $12,000 in inventory, and $3,000 in prepaid expenses.Liabilities totaled $20,000, with $6,000 current and $14,000 long-term.What is Gant's working capital?

Turbo Company's accounts receivable account balance was $100,000 at the beginning of the year and $120,000 at the end of the year.Turbo's percentage change calculation at the end of the current year is

Trend analysis is very useful for analyzing the financial statements, but not for analyzing supplemental information reported in corporate annual reports.

Most companies use a combination of debt and equity to obtain the assets needed to fund their operations.Two leverage ratios are the debt ratio and the debt-to-equity ratio.What do each of these measures show, and how are they each calculated?

Foreman Outfitters, a retail store of camping supplies, has total assets of $170,000 and total liabilities of $70,000.What is Foreman's debt-to-equity ratio?

Land is the ultimate liquid asset.

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Costvolumeprofit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting in a Manufacturing Setting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity-Based Management

Using Accounting Information to Make Managerial Decisions

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralization and Performance Evaluation

Financial Statement Analysis

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Exam 12: Performance Evaluation Revisited: a Balanced Approach

The debt-to-equity ratio measures the amount of financing provided by creditors relative to

Gant Wholesale Company has $2,000 in cash, $20,000 in accounts receivable, $34,000 in inventory, and $1,600 in prepaid expenses.Liabilities totaled $120,000, with $36,000 current and $84,000 long-term.What is Gant's current ratio?

The average days to sell inventory is calculated as

On a common-size income statement, selling expense is shown as a percentage of

Because an absolute dollar change does not give the whole picture, horizontal analysis generally includes which of the following?

In preparing a common-size income statement, you express all revenue and expense accounts as a percentage of net income.

The following financial statement items are shown for J&T Manufacturing. Calculate the common-size percentage for insurance expense.

Working capital is the difference between a firm's total assets and total liabilities.

Three measures of liquidity are working capital, current ratio, and acid-test ratio.What do each of these measures show, and how are they each calculated?

Which of the following is not a measure of liquidity?

The gross margin percentage shows how much of each sales dollar is available after which of the following income statement components has been covered?

Which of the following is not a component of common stockholders' equity?

The quality of assets is assessed through

In preparing a common-size balance sheet, you express all account balances as a percentage of

Gant Wholesale Company has $2,000 in cash, $7,000 in accounts receivable, $12,000 in inventory, and $3,000 in prepaid expenses.Liabilities totaled $20,000, with $6,000 current and $14,000 long-term.What is Gant's working capital?

Turbo Company's accounts receivable account balance was $100,000 at the beginning of the year and $120,000 at the end of the year.Turbo's percentage change calculation at the end of the current year is

Trend analysis is very useful for analyzing the financial statements, but not for analyzing supplemental information reported in corporate annual reports.

Most companies use a combination of debt and equity to obtain the assets needed to fund their operations.Two leverage ratios are the debt ratio and the debt-to-equity ratio.What do each of these measures show, and how are they each calculated?

Foreman Outfitters, a retail store of camping supplies, has total assets of $170,000 and total liabilities of $70,000.What is Foreman's debt-to-equity ratio?

Land is the ultimate liquid asset.

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Costvolumeprofit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting in a Manufacturing Setting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity-Based Management

Using Accounting Information to Make Managerial Decisions

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralization and Performance Evaluation

Financial Statement Analysis

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