Question 1

Trend analysis requires the establishment of a base year for comparison purposes.

Accepted Answer

A) True 
 B)False

Question 2

The following selected amounts were extracted from the financial statements of Flamingo Corporation.
   Prepare a trend analysis for net sales,cost of goods sold,and gross margin.(Round answers to the nearest tenth of 1 percent.)Use Year 1 as the base year.

Accepted Answer

@#IMG-DLM& 
*Year 1: 100 x ($150,000 ÷ $150,000)

Question 3

What is the effect of the payment of an account payable on the current ratio and the quick ratio,respectively? (Assume the current ratio was 2.3 times and the quick ratio was 2.1 times before this transaction.)

Accepted Answer

A)  Increase in current ratio; increase in quick ratio 
B)  Decrease in current ratio; no effect on quick ratio 
C)  Decrease in current ratio; decrease in quick ratio 
D)  No effect on current ratio; no effect on quick ratio 
A)  Increase in current ratio; increase in quick ratio 
B)  Decrease in current ratio; no effect on quick ratio 
C)  Decrease in current ratio; decrease in quick ratio 
D)  No effect on current ratio; no effect on quick ratio

Question 4

Following are the financial statements for Starman Corporation for the year ended December 31,2013.Assume that all balance sheet amounts represent both average and ending figures.     What is the inventory turnover for this corporation?

Accepted Answer

A)  1.6 times 
B)  1.2 times 
C)  2.4 times 
D)  4.0 times 
A)  1.6 times 
B)  1.2 times 
C)  2.4 times 
D)  4.0 times

Question 5

What is the best way to study the relationship of the components of financial statements?

Accepted Answer

A)  Perform horizontal analysis 
B)  Perform ratio analysis 
C)  Prepare common-size statements 
D)  Perform trend analysis 
A)  Perform horizontal analysis 
B)  Perform ratio analysis 
C)  Prepare common-size statements 
D)  Perform trend analysis

Question 6

The current ratio is a

Accepted Answer

A)  long-term solvency ratio. 
B)  market strength ratio. 
C)  profitability ratio. 
D)  liquidity ratio. 
A)  long-term solvency ratio. 
B)  market strength ratio. 
C)  profitability ratio. 
D)  liquidity ratio.

Question 7

The following information pertains to Jasmin Corporation.Assume that all balance sheet amounts represent both average and ending figures.     Jasmin Corporation had 6,000 shares of common stock issued and outstanding.The market price of Jasmin common stock on December 31,2013,was $20.Jasmin paid dividends of $0.90 per share during 2013.
What is the return on assets for this corporation?

Accepted Answer

A)  5.0 percent 
B)  11.7 percent 
C)  26.7 percent 
D)  10.0 percent 
A)  5.0 percent 
B)  11.7 percent 
C)  26.7 percent 
D)  10.0 percent

Question 8

Use the following information to calculate the ratios requested below.Round answers to one decimal place.Show your work.

Accepted Answer

The answer of Use the following information to calculate the...

Question 9

Use the following information to calculate the ratios requested below.Round answers to one decimal place.Show your work.

Accepted Answer

The answer of Use the following information to calculate the...

Question 10

Given the following information,calculate the payables turnover and days' payable.Round to two decimal places.
   
a.Payables turnover
b.Days' payable

Accepted Answer

a.5.57 times {($16,642,000 + $

Question 11

Net income is needed to calculate all of the following ratios,except

Accepted Answer

A)  return on assets. 
B)  profit margin. 
C)  return on equity. 
D)  asset turnover. 
A)  return on assets. 
B)  profit margin. 
C)  return on equity. 
D)  asset turnover.

Question 12

All of the following are limitations on the use of industry norms,except

Accepted Answer

A)  companies that are not strictly comparable. 
B)  the use of different accounting procedures. 
C)  the existence of conglomerates. 
D)  the presentation of interim financial statements. 
A)  companies that are not strictly comparable. 
B)  the use of different accounting procedures. 
C)  the existence of conglomerates. 
D)  the presentation of interim financial statements.

Question 13

An increase in which of the following ratios is considered unfavorable?

Accepted Answer

A)  Interest coverage ratio 
B)  Cash flows to assets 
C)  Quick ratio 
D)  Days' sales uncollected 
A)  Interest coverage ratio 
B)  Cash flows to assets 
C)  Quick ratio 
D)  Days' sales uncollected

Question 14

The index number used in trend analysis is computed by dividing the base year amount by the index year amount,and multiplying that result by 100.

Accepted Answer

A) True 
 B)False

Question 15

A limitation of using industry norms in financial performance evaluation is that some companies in the same industry may not be comparable.

Accepted Answer

A) True 
 B)False

Question 16

It is possible for horizontal analysis to indicate a decrease in revenues from one year to another and an increase in net income.

Accepted Answer

A) True 
 B)False

Question 17

An increase in which of the following ratios is considered unfavorable?

Accepted Answer

A)  Cash flow yield 
B)  Current ratio 
C)  Price/earnings (P/
E) ratio 
D)  Debt to equity ratio 
A)  Cash flow yield 
B)  Current ratio 
C)  Price/earnings (P/
E) ratio 
D)  Debt to equity ratio

Question 18

Horizontal analysis will reveal,for example,the percentage of net sales consumed by salaries expense.

Accepted Answer

A) True 
 B)False

Question 19

Executive officers' compensation is typically comprised of all of the following except

Accepted Answer

A)  incentive bonuses. 
B)  annual base salaries. 
C)  declared dividends. 
D)  stock option awards. 
A)  incentive bonuses. 
B)  annual base salaries. 
C)  declared dividends. 
D)  stock option awards.

Question 20

A corporation's compensation committee,as required by the Sarbanes-Oxley Act of 2002,determines the pay of

Accepted Answer

A)  the hourly wage earners. 
B)  the top executives. 
C)  the independent auditors. 
D)  the members of the board of directors. 
A)  the hourly wage earners. 
B)  the top executives. 
C)  the independent auditors. 
D)  the members of the board of directors.

Trend analysis requires the establishment of a base year for comparison purposes.

The following selected amounts were extracted from the financial statements of Flamingo Corporation. Prepare a trend analysis for net sales,cost of goods sold,and gross margin.(Round answers to the nearest tenth of 1 percent.)Use Year 1 as the base year.

What is the effect of the payment of an account payable on the current ratio and the quick ratio,respectively? (Assume the current ratio was 2.3 times and the quick ratio was 2.1 times before this transaction.)

Following are the financial statements for Starman Corporation for the year ended December 31,2013.Assume that all balance sheet amounts represent both average and ending figures. What is the inventory turnover for this corporation?

What is the best way to study the relationship of the components of financial statements?

The current ratio is a

Use the following information to calculate the ratios requested below.Round answers to one decimal place.Show your work.

Use the following information to calculate the ratios requested below.Round answers to one decimal place.Show your work.

Given the following information,calculate the payables turnover and days' payable.Round to two decimal places. a.Payables turnover b.Days' payable

Net income is needed to calculate all of the following ratios,except

All of the following are limitations on the use of industry norms,except

An increase in which of the following ratios is considered unfavorable?

The index number used in trend analysis is computed by dividing the base year amount by the index year amount,and multiplying that result by 100.

A limitation of using industry norms in financial performance evaluation is that some companies in the same industry may not be comparable.

It is possible for horizontal analysis to indicate a decrease in revenues from one year to another and an increase in net income.

An increase in which of the following ratios is considered unfavorable?

Horizontal analysis will reveal,for example,the percentage of net sales consumed by salaries expense.

Executive officers' compensation is typically comprised of all of the following except

A corporation's compensation committee,as required by the Sarbanes-Oxley Act of 2002,determines the pay of

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Investments

Filters

Exam 14: Financial Performance Measurement

Trend analysis requires the establishment of a base year for comparison purposes.

The following selected amounts were extracted from the financial statements of Flamingo Corporation. Prepare a trend analysis for net sales,cost of goods sold,and gross margin.(Round answers to the nearest tenth of 1 percent.)Use Year 1 as the base year.

What is the effect of the payment of an account payable on the current ratio and the quick ratio,respectively? (Assume the current ratio was 2.3 times and the quick ratio was 2.1 times before this transaction.)

Following are the financial statements for Starman Corporation for the year ended December 31,2013.Assume that all balance sheet amounts represent both average and ending figures. What is the inventory turnover for this corporation?

What is the best way to study the relationship of the components of financial statements?

The current ratio is a

Use the following information to calculate the ratios requested below.Round answers to one decimal place.Show your work.

Use the following information to calculate the ratios requested below.Round answers to one decimal place.Show your work.

Given the following information,calculate the payables turnover and days' payable.Round to two decimal places. a.Payables turnover b.Days' payable

Net income is needed to calculate all of the following ratios,except

All of the following are limitations on the use of industry norms,except

An increase in which of the following ratios is considered unfavorable?

The index number used in trend analysis is computed by dividing the base year amount by the index year amount,and multiplying that result by 100.

A limitation of using industry norms in financial performance evaluation is that some companies in the same industry may not be comparable.

It is possible for horizontal analysis to indicate a decrease in revenues from one year to another and an increase in net income.

An increase in which of the following ratios is considered unfavorable?

Horizontal analysis will reveal,for example,the percentage of net sales consumed by salaries expense.

Executive officers' compensation is typically comprised of all of the following except

A corporation's compensation committee,as required by the Sarbanes-Oxley Act of 2002,determines the pay of

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Investments

Filters