Question 1

The current ratio is a measure of a company's solvency.

Accepted Answer

A) True 
 B)False

Question 2

Markot Corporation purchased $400,000 of securities and classified them as available-for-sale.The market value of the securities went up to $475,000.Markot Corporation should ________.

Accepted Answer

A) show these securities on its balance sheet at their market value 
B) report a holding gain on its income statement 
C) report a holding loss on its income statement 
D) report an unrealized gain on its income statement 
A) show these securities on its balance sheet at their market value 
B) report a holding gain on its income statement 
C) report a holding loss on its income statement 
D) report an unrealized gain on its income statement

Question 3

The accounts receivable turnover ratio is a ________ ratio.

Accepted Answer

A) liquidity 
B) solvency 
C) profitability 
D) market indicator 
A) liquidity 
B) solvency 
C) profitability 
D) market indicator

Question 4

The following information is provided from EZ Electronics' annual report for the years ended December 31:
 
-Refer to the EZ Electronics annual report above.This information is from EZ Electronics' ________.

Accepted Answer

A) income statement 
B) balance sheet 
C) statement of cash flows 
D) statement of changes in shareholders' equity 
A) income statement 
B) balance sheet 
C) statement of cash flows 
D) statement of changes in shareholders' equity

Question 5

The FASB requires that ________ and ________ need to be separated from the regular earnings of a business.

Accepted Answer

A) other revenues and expenses; extraordinary items 
B) discontinued operations; other revenues and expenses 
C) extraordinary items; discontinued operations 
D) extraordinary items; changes in accounting principle 
A) other revenues and expenses; extraordinary items 
B) discontinued operations; other revenues and expenses 
C) extraordinary items; discontinued operations 
D) extraordinary items; changes in accounting principle

Question 6

Alpha Enterprise has total current assets of $2,000,000 and total current liabilities of $800,000.If the company purchases $100,000 of inventory on account,while none of its other assets and liabilities change,its current ratio will ________.

Accepted Answer

A) increase 
B) decrease 
C) stay the same 
D) The answer cannot be determined from the information given. 
A) increase 
B) decrease 
C) stay the same 
D) The answer cannot be determined from the information given.

Question 7

Which financial statement(s)do you need to calculate the current ratio?

Accepted Answer

A) only the income statement 
B) only the balance sheet 
C) both the income statement and the balance sheet 
D) both the statement of cash flows and the income statement 
A) only the income statement 
B) only the balance sheet 
C) both the income statement and the balance sheet 
D) both the statement of cash flows and the income statement

Question 8

The following information is provided from EZ Electronics' annual report for the years ended December 31:
 
-Refer to the EZ Electronics annual report above.Using horizontal analysis with 2010 as the base year,$\bold{2012}$ sales would be represented as ________.

Accepted Answer

A) 20%. 
B) 9%. 
C) 109%. 
D) 120%. 
A) 20%. 
B) 9%. 
C) 109%. 
D) 120%.

Question 9

Ratios used to determine whether or not a company's stock is a good investment are ________.

Accepted Answer

A) liquidity ratios 
B) solvency ratios 
C) profitability ratios 
D) market indicators 
A) liquidity ratios 
B) solvency ratios 
C) profitability ratios 
D) market indicators

Question 10

The asset turnover ratio is a ________ ratio.

Accepted Answer

A) liquidity 
B) solvency 
C) profitability 
D) market indicator 
A) liquidity 
B) solvency 
C) profitability 
D) market indicator

Question 11

A loss from a tornado in Kansas could be classified as an extraordinary item.

Accepted Answer

A) True 
 B)False

Question 12

A tornado in New York City caused $48,000 worth of damage to Out of Africa's store and merchandise.The insurance company paid the business $50,000.The $2,000 gain would be reported on the income statement as part of ________.

Accepted Answer

A) discontinued operations 
B) extraordinary items 
C) other revenues and expenses 
D) continuing operations 
A) discontinued operations 
B) extraordinary items 
C) other revenues and expenses 
D) continuing operations

Question 13

If a company plans to hold debt securities until they mature,they are called ________.

Accepted Answer

A) held-to-maturity securities 
B) trading securities 
C) available-for-sale securities 
D) conservative investments 
A) held-to-maturity securities 
B) trading securities 
C) available-for-sale securities 
D) conservative investments

Question 14

Cash from operations to current liabilities measures a company's profitability.

Accepted Answer

A) True 
 B)False

Question 15

Alpha Enterprise has total current assets of $2,000,000 and total current liabilities of $800,000.If the company pays $100,000 of its accounts payable,its current ratio will ________.

Accepted Answer

A) increase 
B) decrease 
C) stay the same 
D) The answer cannot be determined from the information given. 
A) increase 
B) decrease 
C) stay the same 
D) The answer cannot be determined from the information given.

Question 16

Match between columns
                        Premises: Ratios that measure the ability of a company to survive over a long period of time
An analytical technique in which each item on a financial statement is expressed as a percentage of a selected item on the financial statement
The market price per share of stock divided by the earnings per share of the stock
Total liabilities divided by total shareholders' equity
Net income divided by average common shareholders' equity
Dividends per share divided by the current market price per share
Ratios that measure the ability of a company to pay its debts and to meet unexpected needs for cash in the short run
Ratios that measure the income or operating success of a company for a given period of time
Ratios that measure whether or not the stock of a company is a good investment

Accepted Answer

The Answer of debt-to-equity ratio and profitability ratios and return is...

Question 17

Comprehensive income equals ________.

Accepted Answer

A) net income minus preferred dividends 
B) net income 
C) net income plus other comprehensive income 
D) net income plus all non-operating gains and losses 
A) net income minus preferred dividends 
B) net income 
C) net income plus other comprehensive income 
D) net income plus all non-operating gains and losses

Question 18

The following information is provided from EZ Electronics' annual report for the years ended December 31:
 
-Refer to the EZ Electronics annual report above.Using horizontal analysis with 2010 as the base year,$\bold{2011}$ net income would be represented as ________.

Accepted Answer

A) 12%. 
B) 13%. 
C) 113%. 
D) 22%. 
A) 12%. 
B) 13%. 
C) 113%. 
D) 22%.

Question 19

The following information is provided from EZ Electronics' annual report for the years ended December 31:
 
-Refer to the EZ Electronics annual report above.Using horizontal analysis with 2010 as the base year,$\bold{2011}$ operating expenses would be represented as ________.

Accepted Answer

A) 38% 
B) 105% 
C) 5% 
D) 40% 
A) 38% 
B) 105% 
C) 5% 
D) 40%

Question 20

The profit margin ratio is a ________ ratio.

Accepted Answer

A) liquidity 
B) solvency 
C) profitability 
D) market indicator 
A) liquidity 
B) solvency 
C) profitability 
D) market indicator

The current ratio is a measure of a company's solvency.

Markot Corporation purchased $400,000 of securities and classified them as available-for-sale.The market value of the securities went up to $475,000.Markot Corporation should ________.

The accounts receivable turnover ratio is a ________ ratio.

The following information is provided from EZ Electronics' annual report for the years ended December 31: -Refer to the EZ Electronics annual report above.This information is from EZ Electronics' ________.

The FASB requires that and need to be separated from the regular earnings of a business.

Alpha Enterprise has total current assets of $2,000,000 and total current liabilities of $800,000.If the company purchases $100,000 of inventory on account,while none of its other assets and liabilities change,its current ratio will ________.

Which financial statement(s)do you need to calculate the current ratio?

Ratios used to determine whether or not a company's stock is a good investment are ________.

The asset turnover ratio is a ________ ratio.

A loss from a tornado in Kansas could be classified as an extraordinary item.

A tornado in New York City caused $48,000 worth of damage to Out of Africa's store and merchandise.The insurance company paid the business $50,000.The $2,000 gain would be reported on the income statement as part of ________.

If a company plans to hold debt securities until they mature,they are called ________.

Cash from operations to current liabilities measures a company's profitability.

Alpha Enterprise has total current assets of $2,000,000 and total current liabilities of $800,000.If the company pays $100,000 of its accounts payable,its current ratio will ________.

Comprehensive income equals ________.

The profit margin ratio is a ________ ratio.

Business: Whats It All About

Qualities of Accounting Information

Accruals and Deferrals: Timing Is Everything in Accounting

Payment for Goods and Services: Cash and Accounts Receivable

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Liabilities

Accounting for Shareholders Equity

Preparing and Analyzing the Statement of Cash Flows

Quality of Earnings, corporate Governance, and Ifrs

Filters

Exam 10: Using Financial Statement Analysis to Evaluate Firm Performance

The current ratio is a measure of a company's solvency.

Markot Corporation purchased $400,000 of securities and classified them as available-for-sale.The market value of the securities went up to $475,000.Markot Corporation should ________.

The accounts receivable turnover ratio is a ________ ratio.

The following information is provided from EZ Electronics' annual report for the years ended December 31: -Refer to the EZ Electronics annual report above.This information is from EZ Electronics' ________.

The FASB requires that ________ and ________ need to be separated from the regular earnings of a business.

Alpha Enterprise has total current assets of $2,000,000 and total current liabilities of $800,000.If the company purchases $100,000 of inventory on account,while none of its other assets and liabilities change,its current ratio will ________.

Which financial statement(s)do you need to calculate the current ratio?

The following information is provided from EZ Electronics' annual report for the years ended December 31: -Refer to the EZ Electronics annual report above.Using horizontal analysis with 2010 as the base year, 2012\bold{2012}2012 sales would be represented as ________.

Ratios used to determine whether or not a company's stock is a good investment are ________.

The asset turnover ratio is a ________ ratio.

A loss from a tornado in Kansas could be classified as an extraordinary item.

A tornado in New York City caused $48,000 worth of damage to Out of Africa's store and merchandise.The insurance company paid the business $50,000.The $2,000 gain would be reported on the income statement as part of ________.

If a company plans to hold debt securities until they mature,they are called ________.

Cash from operations to current liabilities measures a company's profitability.

Alpha Enterprise has total current assets of $2,000,000 and total current liabilities of $800,000.If the company pays $100,000 of its accounts payable,its current ratio will ________.

Comprehensive income equals ________.

The following information is provided from EZ Electronics' annual report for the years ended December 31: -Refer to the EZ Electronics annual report above.Using horizontal analysis with 2010 as the base year, 2011\bold{2011}2011 net income would be represented as ________.

The following information is provided from EZ Electronics' annual report for the years ended December 31: -Refer to the EZ Electronics annual report above.Using horizontal analysis with 2010 as the base year, 2011\bold{2011}2011 operating expenses would be represented as ________.

The profit margin ratio is a ________ ratio.

Business: Whats It All About

Qualities of Accounting Information

Accruals and Deferrals: Timing Is Everything in Accounting

Payment for Goods and Services: Cash and Accounts Receivable

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Liabilities

Accounting for Shareholders Equity

Preparing and Analyzing the Statement of Cash Flows

Quality of Earnings, corporate Governance, and Ifrs

Filters

The FASB requires that and need to be separated from the regular earnings of a business.