Question 1

All of the following accounts would typically be used to calculate the quick ratio except:

Accepted Answer

A) cash. 
B) equipment. 
C) accounts payable. 
D) accounts receivable. 
E) None of the answer choices is correct. 
A) cash. 
B) equipment. 
C) accounts payable. 
D) accounts receivable. 
E) None of the answer choices is correct. B

Question 2

Most public companies present trend information in their annual reports.

Accepted Answer

A) True 
 B)False  True

Question 3

All of the following are nonfinancial measures that might be used by transportation companies such as FedEx except:

Accepted Answer

A) percentage of damage-free goods. 
B) percentage of on-time deliveries. 
C) average collection period. 
D) hours of employee training. 
E) None of the answer choices is correct. 
A) percentage of damage-free goods. 
B) percentage of on-time deliveries. 
C) average collection period. 
D) hours of employee training. 
E) None of the answer choices is correct. C

Question 4

All of the following measures focus on short-term liquidity except:

Accepted Answer

A) current ratio. 
B) debt to assets ratio. 
C) quick ratio. 
D) receivables turnover ratio. 
E) None of the answer choices is correct. 
A) current ratio. 
B) debt to assets ratio. 
C) quick ratio. 
D) receivables turnover ratio. 
E) None of the answer choices is correct.

Question 5

All of the following account balances would typically be used to calculate a current ratio except:

Accepted Answer

A) sales. 
B) accounts receivable. 
C) accounts payable. 
D) cash. 
E) None of the answer choices is correct. 
A) sales. 
B) accounts receivable. 
C) accounts payable. 
D) cash. 
E) None of the answer choices is correct.

Question 6

All of the following measures focus on long-term solvency except:

Accepted Answer

A) inventory turnover ratio. 
B) times interest earned. 
C) debt to assets. 
D) debt to equity. 
E) None of the answer choices is correct. 
A) inventory turnover ratio. 
B) times interest earned. 
C) debt to assets. 
D) debt to equity. 
E) None of the answer choices is correct.

Question 7

The following condensed income statement is for Mason Inc.

Compute the following ratios for 2013,and provide a brief explanation after each ratio (round computations to two decimal places):
(1)Current ratio
(2)Quick ratio
(3)Receivables turnover ratio
(4)Average collection period
(5)Inventory turnover ratio
(6)Average sale period

Accepted Answer

(1)Current ratio 1.10 to 1 for every dol

Question 8

Exhibit 13-1
Xavier Company reported the following income statement and balance sheet amounts on December 31,2013.
   Inventory and prepaid expenses account for $50,000 of the 2013 current assets.
Average inventory for 2013 is $36,000.
Average net accounts receivable for 2013 is $62,000.
Average one-day sales are $5,900.
There are 12,000 shares of common stock outstanding at the end of 2013.
The market price per share of common stock is $27 at the end of 2013.
The EPS for 2013 is equal to $1.50 per share.
-Refer to Exhibit 13-1.What is the debt to assets ratio for 2012 (rounded to two decimal places)?

Accepted Answer

A) 0.30 
B) 0.50 
C) 2.00 
D) 2.05 
E) None of the answer choices is correct. 
A) 0.30 
B) 0.50 
C) 2.00 
D) 2.05 
E) None of the answer choices is correct.

Question 9

The total assets dollar amount is typically used as the base for a common-size balance sheet analysis.

Accepted Answer

A) True 
 B)False

Question 10

The following debt to equity ratio is for two companies in the same industry.
 
Which of the following statements is always true?

Accepted Answer

A) Company A is more profitable than Company B. 
B) Company B is more profitable than Company A. 
C) Company A is more highly leveraged than Company B. 
D) Company B is more highly leveraged than Company A. 
E) None of the answer choices is correct. 
A) Company A is more profitable than Company B. 
B) Company B is more profitable than Company A. 
C) Company A is more highly leveraged than Company B. 
D) Company B is more highly leveraged than Company A. 
E) None of the answer choices is correct.

Question 11

During 2013,Victory Inc.had beginning accounts receivable of $42,000 and ending accounts receivable of $48,000.Its net sales of $450,000 are composed of 20% cash sales and 80% credit sales.Based on this information,what is Victory's receivables turnover ratio?

Accepted Answer

A) 7.5 times 
B) 8.0 times 
C) 10.0 times 
D) 2.0 times 
E) None of the answer choices is correct. 
A) 7.5 times 
B) 8.0 times 
C) 10.0 times 
D) 2.0 times 
E) None of the answer choices is correct.

Question 12

During 2013,Columbia Inc.had beginning accounts receivable of $680,000 and ending accounts receivable of $760,000.Its net sales of $4,500,000 are composed of 20% cash sales and 80% credit sales.Based on this information,what is Columbia's average collection period?

Accepted Answer

A) 58.4 days 
B) 292.0 days 
C) 73.0 days 
D) 5.0 days 
E) None of the answer choices is correct. 
A) 58.4 days 
B) 292.0 days 
C) 73.0 days 
D) 5.0 days 
E) None of the answer choices is correct.

Question 13

On a common-size income statement,net income should be stated as a percentage of:

Accepted Answer

A) gross margin. 
B) total assets. 
C) net sales. 
D) current assets. 
E) None of the answer choices is correct. 
A) gross margin. 
B) total assets. 
C) net sales. 
D) current assets. 
E) None of the answer choices is correct.

Question 14

Belden Company has a profit margin ratio of 10%.This means that for every dollar of net sales the company makes,it generates ten dollars in net income.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following types of measures focuses primarily on income statement information?

Accepted Answer

A) long-term solvency measures. 
B) short-term liquidity measures. 
C) market valuation measures. 
D) profitability measures. 
E) None of the answer choices is correct. 
A) long-term solvency measures. 
B) short-term liquidity measures. 
C) market valuation measures. 
D) profitability measures. 
E) None of the answer choices is correct.

Question 16

Assume that Crimson Company's market price per share remains at $20 over a two-year period.Over the same two-year period,Crimson sells an additional 100,000 shares of stock to investors.Net income was the same for both years.The issuance of additional shares will have the following effect for the company over the two-year period:

Accepted Answer

A) Market capitalization will decrease. 
B) Market capitalization will increase. 
C) Market capitalization will stay the same. 
D) Earnings per share will increase. 
E) None of the answer choices is correct. 
A) Market capitalization will decrease. 
B) Market capitalization will increase. 
C) Market capitalization will stay the same. 
D) Earnings per share will increase. 
E) None of the answer choices is correct.

Question 17

Which of the following is the best reason to use a common-size analysis?

Accepted Answer

A) To change financial information in different currencies into a common currency. 
B) To evaluate a company relative to its competitors. 
C) To calculate trend percentages. 
D) To assess nonfinancial measures of performance. 
E) None of the answer choices is correct. 
A) To change financial information in different currencies into a common currency. 
B) To evaluate a company relative to its competitors. 
C) To calculate trend percentages. 
D) To assess nonfinancial measures of performance. 
E) None of the answer choices is correct.

Question 18

The following condensed income statement is for Mason Inc.

Compute the following ratios for 2013,and provide a brief explanation after each ratio (round percentage computations to one decimal place and earnings per share to two decimal places):
(1)Gross margin ratio
(2)Profit margin ratio
(3)Return on assets
(4)Return on common shareholders' equity
(5)Earnings per share (assume weighted average shares outstanding totaled 2,900,000 shares)
(6)Market capitalization (assume 3,000,000 shares were issued and outstanding at December 31,2013,and the market price was $9.00 per share)
(7)Price-earnings ratio

Accepted Answer

(1)Gross margin ratio 61.7% for every do

Question 19

Filmore Inc.has the following information available for 2012 and 2013:
 
If you were performing a trend analysis on this information,you would say that current liabilities have:

Accepted Answer

A) increased by 37.5%. 
B) increased by 60%. 
C) increased by 62.5%. 
D) increased by 60% 
E) None of the answer choices is correct. 
A) increased by 37.5%. 
B) increased by 60%. 
C) increased by 62.5%. 
D) increased by 60% 
E) None of the answer choices is correct.

Question 20

If net sales is growing at a greater rate than cost of goods sold,which of the following will always be true?

Accepted Answer

A) The gross margin ratio will decrease. 
B) The gross margin ratio will increase. 
C) Net income will increase. 
D) Net income will decrease. 
E) None of the answer choices is correct. 
A) The gross margin ratio will decrease. 
B) The gross margin ratio will increase. 
C) Net income will increase. 
D) Net income will decrease. 
E) None of the answer choices is correct.

All of the following accounts would typically be used to calculate the quick ratio except:

Most public companies present trend information in their annual reports.

All of the following are nonfinancial measures that might be used by transportation companies such as FedEx except:

All of the following measures focus on short-term liquidity except:

All of the following account balances would typically be used to calculate a current ratio except:

All of the following measures focus on long-term solvency except:

The total assets dollar amount is typically used as the base for a common-size balance sheet analysis.

The following debt to equity ratio is for two companies in the same industry. Which of the following statements is always true?

During 2013,Victory Inc.had beginning accounts receivable of $42,000 and ending accounts receivable of $48,000.Its net sales of $450,000 are composed of 20% cash sales and 80% credit sales.Based on this information,what is Victory's receivables turnover ratio?

During 2013,Columbia Inc.had beginning accounts receivable of $680,000 and ending accounts receivable of $760,000.Its net sales of $4,500,000 are composed of 20% cash sales and 80% credit sales.Based on this information,what is Columbia's average collection period?

On a common-size income statement,net income should be stated as a percentage of:

Belden Company has a profit margin ratio of 10%.This means that for every dollar of net sales the company makes,it generates ten dollars in net income.

Which of the following types of measures focuses primarily on income statement information?

Which of the following is the best reason to use a common-size analysis?

Filmore Inc.has the following information available for 2012 and 2013: If you were performing a trend analysis on this information,you would say that current liabilities have:

If net sales is growing at a greater rate than cost of goods sold,which of the following will always be true?

What Is Managerial Accounting

How Is Job Costing Used to Track Production Costs

How Does an Organization Use Activity-Based Costing to Allocate Overhead Costs

How Is Process Costing Used to Track Production Costs

How Do Organizations Identify Cost Behavior Patterns

How Is Cost-Volume-Profit Analysis Used for Decision Making

How Are Relevant Revenues and Costs Used to Make Decisions

How Is Capital Budgeting Used to Make Decisions

How Are Operating Budgets Created

How Do Managers Evaluate Performance Using Cost Variance Analysis

How Do Managers Evaluate Performance in Decentralized Organizations

How Is the Statement of Cash Flows Prepared and Used

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Exam 13: How Do Managers Use Financial and Nonfinancial Performance Measures

All of the following accounts would typically be used to calculate the quick ratio except:

Most public companies present trend information in their annual reports.

All of the following are nonfinancial measures that might be used by transportation companies such as FedEx except:

All of the following measures focus on short-term liquidity except:

All of the following account balances would typically be used to calculate a current ratio except:

All of the following measures focus on long-term solvency except:

The total assets dollar amount is typically used as the base for a common-size balance sheet analysis.

The following debt to equity ratio is for two companies in the same industry. Which of the following statements is always true?

During 2013,Victory Inc.had beginning accounts receivable of $42,000 and ending accounts receivable of $48,000.Its net sales of $450,000 are composed of 20% cash sales and 80% credit sales.Based on this information,what is Victory's receivables turnover ratio?

During 2013,Columbia Inc.had beginning accounts receivable of $680,000 and ending accounts receivable of $760,000.Its net sales of $4,500,000 are composed of 20% cash sales and 80% credit sales.Based on this information,what is Columbia's average collection period?

On a common-size income statement,net income should be stated as a percentage of:

Belden Company has a profit margin ratio of 10%.This means that for every dollar of net sales the company makes,it generates ten dollars in net income.

Which of the following types of measures focuses primarily on income statement information?

Which of the following is the best reason to use a common-size analysis?

Filmore Inc.has the following information available for 2012 and 2013: If you were performing a trend analysis on this information,you would say that current liabilities have:

If net sales is growing at a greater rate than cost of goods sold,which of the following will always be true?

What Is Managerial Accounting

How Is Job Costing Used to Track Production Costs

How Does an Organization Use Activity-Based Costing to Allocate Overhead Costs

How Is Process Costing Used to Track Production Costs

How Do Organizations Identify Cost Behavior Patterns

How Is Cost-Volume-Profit Analysis Used for Decision Making

How Are Relevant Revenues and Costs Used to Make Decisions

How Is Capital Budgeting Used to Make Decisions

How Are Operating Budgets Created

How Do Managers Evaluate Performance Using Cost Variance Analysis

How Do Managers Evaluate Performance in Decentralized Organizations

How Is the Statement of Cash Flows Prepared and Used

Filters