Question 1

A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lower turnover.

Accepted Answer

A) True 
 B)False

Question 2

The "cumulative effect of a change in accounting principles" is shown below the extraordinary items section on the income statement.

Accepted Answer

A) True 
 B)False

Question 3

Horizontal analysis is the comparison of a company's financial condition and performance to a base amount.

Accepted Answer

A) True 
 B)False

Question 4

The ability to generate positive market expectations is called:

Accepted Answer

A) Liquidity and efficiency. 
B) Liquidity and solvency. 
C) Profitability. 
D) Market prospects. 
E) Creditworthiness. 
A) Liquidity and efficiency. 
B) Liquidity and solvency. 
C) Profitability. 
D) Market prospects. 
E) Creditworthiness.

Question 5

Corona Company's balance sheet accounts follow:  
-What is Corona Company's accounts receivable turnover ratio for 2013,assuming net sales for the period were $1,236,783?

Accepted Answer

A) 27.21 
B) 25.99 
C) 22.91 
D) 30.05 
E) 15.85 
A) 27.21 
B) 25.99 
C) 22.91 
D) 30.05 
E) 15.85

Question 6

Total asset turnover reflects a company's ability to use its assets to generate sales and is an important indication of operating efficiency.

Accepted Answer

A) True 
 B)False

Question 7

Profitability is the ability to generate positive market expectations.

Accepted Answer

A) True 
 B)False

Question 8

Liquidity and efficiency are measures of a company's ability to meet short-term obligations.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following items is not likely to be considered an extraordinary item?

Accepted Answer

A) Loss from an unexpected union strike. 
B) Condemnation of property by the city government. 
C) Loss of use of property due to a new and unexpected environmental regulation. 
D) Loss due to an earthquake in Florida. 
E) Expropriation of property by a foreign government. 
A) Loss from an unexpected union strike. 
B) Condemnation of property by the city government. 
C) Loss of use of property due to a new and unexpected environmental regulation. 
D) Loss due to an earthquake in Florida. 
E) Expropriation of property by a foreign government.

Question 10

The following are summaries from the income statements and balance sheets of Red Shoe,Inc.and Blue Shoe,Inc.

(1) For both companies compute the following ratios for 2014:
(a) Current ratio
(b) Acid-test ratio
(c) Accounts receivable turnover
(d) Inventory turnover
(e) Days' sales in inventory
(f) Days' sales uncollected
Which company do you consider to be the better short-term credit risk? Explain.
(2) For both companies compute the following ratios for 2014:
(a) Profit margin ratio
(b) Return on total assets
(c) Return on common stockholders' equity
Which company do you consider to have better profitability ratios?

Accepted Answer

@#IMG-DLM&
Comment:
Blue Shoe has higher current r

Question 11

Intracompany standards for financial statement analysis are:

Accepted Answer

A) Often based on a company's prior performance. 
B) Often set by competitors. 
C) Set by the company's industry. 
D) Based on rules of thumb. 
E) Published in Dun and Bradstreet. 
A) Often based on a company's prior performance. 
B) Often set by competitors. 
C) Set by the company's industry. 
D) Based on rules of thumb. 
E) Published in Dun and Bradstreet.

Question 12

The higher the accounts receivable turnover,the slower the accounts receivable are collected.

Accepted Answer

A) True 
 B)False

Question 13

A corporation reports the following year-end balance sheet data:
   Calculate the corporation's current ratio and its acid-test ratio.

Accepted Answer

Current ra

Question 14

Identify and explain the four building blocks of financial statement analysis.

Accepted Answer

The four usual building blocks of financ

Question 15

For the following financial statement items,calculate trend percents using 2010 as the base year:

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 16

General standards or guidelines of comparisons include the 2 to 1 level for the current ratio and 1 to 1 level for the acid-test ratio.

Accepted Answer

A) True 
 B)False

Question 17

Market prospects are the ability to provide financial rewards sufficient to attract and retain financing.

Accepted Answer

A) True 
 B)False

Question 18

Comparative calendar-year financial data for a company are shown below:
   Calculate:
(1) Accounts receivable turnover for 2014.
(2) Days' sales uncollected for 2014.
(3) Inventory turnover for 2014.
(4) Days' sales in inventory for 2014.

Accepted Answer

(1) Accounts receivable turnover: = $720

Question 19

A company reports the following comparative income statements:
   What are the costs of goods sold in common-size percents for 2013 and 2014,respectively?

Accepted Answer

The answer of A company reports the following comparative income...

Question 20

General standards of comparisons (rules-of-thumb) are developed from:

Accepted Answer

A) Industry statistics from the government. 
B) Past experience. 
C) Analysis of competitors. 
D) Relations between financial items. 
E) Dun and Bradstreet. 
A) Industry statistics from the government. 
B) Past experience. 
C) Analysis of competitors. 
D) Relations between financial items. 
E) Dun and Bradstreet.

A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lower turnover.

The "cumulative effect of a change in accounting principles" is shown below the extraordinary items section on the income statement.

Horizontal analysis is the comparison of a company's financial condition and performance to a base amount.

The ability to generate positive market expectations is called:

Corona Company's balance sheet accounts follow: -What is Corona Company's accounts receivable turnover ratio for 2013,assuming net sales for the period were $1,236,783?

Total asset turnover reflects a company's ability to use its assets to generate sales and is an important indication of operating efficiency.

Profitability is the ability to generate positive market expectations.

Liquidity and efficiency are measures of a company's ability to meet short-term obligations.

Which of the following items is not likely to be considered an extraordinary item?

Intracompany standards for financial statement analysis are:

The higher the accounts receivable turnover,the slower the accounts receivable are collected.

A corporation reports the following year-end balance sheet data: Calculate the corporation's current ratio and its acid-test ratio.

Identify and explain the four building blocks of financial statement analysis.

For the following financial statement items,calculate trend percents using 2010 as the base year:

General standards or guidelines of comparisons include the 2 to 1 level for the current ratio and 1 to 1 level for the acid-test ratio.

Market prospects are the ability to provide financial rewards sufficient to attract and retain financing.

Comparative calendar-year financial data for a company are shown below: Calculate: (1) Accounts receivable turnover for 2014. (2) Days' sales uncollected for 2014. (3) Inventory turnover for 2014. (4) Days' sales in inventory for 2014.

A company reports the following comparative income statements: What are the costs of goods sold in common-size percents for 2013 and 2014,respectively?

General standards of comparisons (rules-of-thumb) are developed from:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 13: Analyzing and Interpreting Financial Statements

A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lower turnover.

The "cumulative effect of a change in accounting principles" is shown below the extraordinary items section on the income statement.

Horizontal analysis is the comparison of a company's financial condition and performance to a base amount.

The ability to generate positive market expectations is called:

Corona Company's balance sheet accounts follow: -What is Corona Company's accounts receivable turnover ratio for 2013,assuming net sales for the period were $1,236,783?

Total asset turnover reflects a company's ability to use its assets to generate sales and is an important indication of operating efficiency.

Profitability is the ability to generate positive market expectations.

Liquidity and efficiency are measures of a company's ability to meet short-term obligations.

Which of the following items is not likely to be considered an extraordinary item?

Intracompany standards for financial statement analysis are:

The higher the accounts receivable turnover,the slower the accounts receivable are collected.

A corporation reports the following year-end balance sheet data: Calculate the corporation's current ratio and its acid-test ratio.

Identify and explain the four building blocks of financial statement analysis.

For the following financial statement items,calculate trend percents using 2010 as the base year:

General standards or guidelines of comparisons include the 2 to 1 level for the current ratio and 1 to 1 level for the acid-test ratio.

Market prospects are the ability to provide financial rewards sufficient to attract and retain financing.

Comparative calendar-year financial data for a company are shown below: Calculate: (1) Accounts receivable turnover for 2014. (2) Days' sales uncollected for 2014. (3) Inventory turnover for 2014. (4) Days' sales in inventory for 2014.

A company reports the following comparative income statements: What are the costs of goods sold in common-size percents for 2013 and 2014,respectively?

General standards of comparisons (rules-of-thumb) are developed from:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters