Question 1

Ratios analysis eliminates all of the differences of GAAP versus IFRS financial reporting.

Accepted Answer

A) True 
 B)False

Question 2

Describe ratio analysis including its purpose,application and interpretation.

Accepted Answer

A ratio is a mathematical relation betwe

Question 3

Working capital is computed as current liabilities minus current assets.

Accepted Answer

A) True 
 B)False

Question 4

A company's sales in 2010 were $250,000 and in 2011 were $287,500.Using 2010 as the base year,the sales trend percent for 2011 is:

Accepted Answer

A) 87% 
B) 100% 
C) 115% 
D) 15% 
E) 13% 
A) 87% 
B) 100% 
C) 115% 
D) 15% 
E) 13%

Question 5

Describe the purpose of horizontal financial statement analysis and how it is applied.

Accepted Answer

Horizontal analysis is a tool to evaluat

Question 6

Match between columns
                        Premises: (Accounts receivable x Net Sales) x 365
Total liabilities /Total assets
Cost of goods sold /Average inventory .(Net income - preferred dividends)/ Average
taxes/ Interest expense
(Net sales - Cost of goods sold)/ Net sales
(Ending inventory/ cost of goods sold) x 365 Annual cash dividends per share /Market price
per share
Net sales/ Average total assets
Net income /Net sales Income before interest expense and income
common stockholders' equity

Accepted Answer

The Answer of Times interest earned and Total asset turnover is...

Question 7

A company has long-term notes payable of $175,625,taxes of $9,500,ending merchandise inventory of $450,290,interest expense of $14,050,net sales of $720,000 a gross profit ratio of 35%,a times interest earned ratio of 4.23,and total assets of $1,300,417.What is the company's earnings before interest and taxes?

Accepted Answer

A) $252,000 
B) $65,814 
C) $269,710 
D) 106,696 
E) $59,432 
A) $252,000 
B) $65,814 
C) $269,710 
D) 106,696 
E) $59,432

Question 8

A rough guideline states that for a company with no discounts offered,days' sales uncollected should not exceed 1 times the days in its credit period.

Accepted Answer

A) True 
 B)False

Question 9

The standards for comparisons in financial statement analysis include (1)_______________, (2)________________, (3)_________________ and (4)_______________.

Accepted Answer

Intracompany,competi

Question 10

Explain the purpose of financial statement analysis for both external and internal users.

Accepted Answer

The purpose of financial statement analy

Question 11

A company has sales of $5,417,000,a gross profit ratio of 35%,ending merchandise inventory of $201,425,and total current assets of $1,539,600.What is the days sales' in inventory ratio for the year?

Accepted Answer

A) 6.10 
B) 20.88 
C) 26.15 
D) 22.67 
E) 15.77 
A) 6.10 
B) 20.88 
C) 26.15 
D) 22.67 
E) 15.77

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Dividing accounts receivable by net sales and multiplying the result by 365 is equal to the:

Accepted Answer

A) Profit margin 
B) Days' sales uncollected 
C) Accounts receivable turnover ratio 
D) Average accounts receivable ratio 
E) Current ratio 
A) Profit margin 
B) Days' sales uncollected 
C) Accounts receivable turnover ratio 
D) Average accounts receivable ratio 
E) Current ratio

Question 14

Identify and describe three common tools of financial statement analysis.

Accepted Answer

Three common tools of financial statemen

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

A company can change from one acceptable accounting principle to another as long as the change __________________________________________ in its financial statements.

Accepted Answer

Improves t

Question 17

Comparative financial statements are reports that show financial amounts placed side by side in columns on a single statement for analysis purposes.

Accepted Answer

A) True 
 B)False

Question 18

Reporting of discontinued segments includes:

Accepted Answer

A) Income or loss from operating the discontinued segment net of tax and gain or loss from disposal of the segment's net assets net of tax 
B) Extraordinary items 
C) Changes in accounting principle 
D) Items that are both unusual and infrequent 
E) Writing off of receivables 
A) Income or loss from operating the discontinued segment net of tax and gain or loss from disposal of the segment's net assets net of tax 
B) Extraordinary items 
C) Changes in accounting principle 
D) Items that are both unusual and infrequent 
E) Writing off of receivables

Question 19

Industry standards for financial statement analysis:

Accepted Answer

A) Are based on a company's prior performance 
B) Are set by the government 
C) Are set by the financial performance and condition of the company's industry 
D) Are based on rules of thumb 
E) Compare a company's income with the prior year's income 
A) Are based on a company's prior performance 
B) Are set by the government 
C) Are set by the financial performance and condition of the company's industry 
D) Are based on rules of thumb 
E) Compare a company's income with the prior year's income

Question 20

Explain the composition of retained earnings and identify the special items that are reported in it.

Accepted Answer

Retained earnings generally consists of

Ratios analysis eliminates all of the differences of GAAP versus IFRS financial reporting.

Describe ratio analysis including its purpose,application and interpretation.

Working capital is computed as current liabilities minus current assets.

A company's sales in 2010 were $250,000 and in 2011 were $287,500.Using 2010 as the base year,the sales trend percent for 2011 is:

Describe the purpose of horizontal financial statement analysis and how it is applied.

A rough guideline states that for a company with no discounts offered,days' sales uncollected should not exceed 1 times the days in its credit period.

The standards for comparisons in financial statement analysis include (1)_______, (2), (3)_ and (4)_______.

Explain the purpose of financial statement analysis for both external and internal users.

A company has sales of $5,417,000,a gross profit ratio of 35%,ending merchandise inventory of $201,425,and total current assets of $1,539,600.What is the days sales' in inventory ratio for the year?

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

Dividing accounts receivable by net sales and multiplying the result by 365 is equal to the:

Identify and describe three common tools of financial statement analysis.

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

A company can change from one acceptable accounting principle to another as long as the change __________________________________________ in its financial statements.

Comparative financial statements are reports that show financial amounts placed side by side in columns on a single statement for analysis purposes.

Reporting of discontinued segments includes:

Industry standards for financial statement analysis:

Explain the composition of retained earnings and identify the special items that are reported in it.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Exam 13: Analyzing and Interpreting Financial Statements

Ratios analysis eliminates all of the differences of GAAP versus IFRS financial reporting.

Describe ratio analysis including its purpose,application and interpretation.

Working capital is computed as current liabilities minus current assets.

A company's sales in 2010 were $250,000 and in 2011 were $287,500.Using 2010 as the base year,the sales trend percent for 2011 is:

Describe the purpose of horizontal financial statement analysis and how it is applied.

A rough guideline states that for a company with no discounts offered,days' sales uncollected should not exceed 1 times the days in its credit period.

The standards for comparisons in financial statement analysis include (1)_______________, (2)________________, (3)_________________ and (4)_______________.

Explain the purpose of financial statement analysis for both external and internal users.

A company has sales of $5,417,000,a gross profit ratio of 35%,ending merchandise inventory of $201,425,and total current assets of $1,539,600.What is the days sales' in inventory ratio for the year?

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

Dividing accounts receivable by net sales and multiplying the result by 365 is equal to the:

Identify and describe three common tools of financial statement analysis.

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

A company can change from one acceptable accounting principle to another as long as the change __________________________________________ in its financial statements.

Comparative financial statements are reports that show financial amounts placed side by side in columns on a single statement for analysis purposes.

Reporting of discontinued segments includes:

Industry standards for financial statement analysis:

Explain the composition of retained earnings and identify the special items that are reported in it.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

The standards for comparisons in financial statement analysis include (1)_______, (2), (3)_ and (4)_______.