Question 1

The following data are taken from the financial statements:

Accepted Answer

(a)

Question 2

When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item after income from continuing operations on the income statement.

Accepted Answer

A) True 
 B)False  True

Question 3

The following information was taken from the financial statement of Fox Resources for December 31 of the current fiscal year:
   The net income was $600,000 and the declared dividends on the common stock were $125,000 for the current year. The market price of the common stock is $20 per share.
Required:
Calculate for the common stock:
(1) earnings per share
(2) the price-earnings ratio
(3) the dividends per share and the dividend yield.
Round to one decimal place except earnings per share, which should be rounded to two decimal places.

Accepted Answer

The answer of The following information was taken from the...

Question 4

The following data are taken from the balance sheet at the end of the current year. Determine the (a) working capital, (b) current ratio, and (c) quick ratio. Present figures used in your computations. Round ratios to the nearest tenth.

Accepted Answer

The answer of The following data are taken from the...

Question 5

The Cash and Accounts Receivable for a company are provided below:
   Based on this information, what is the amount and percentage of increase or decrease that would be shown in a balance sheet with horizontal analysis?

Accepted Answer

The answer of The Cash and Accounts Receivable for a...

Question 6

An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to

Accepted Answer

A)  decrease 
B)  remain the same 
C)  either increase or decrease 
D)  increase 
A)  decrease 
B)  remain the same 
C)  either increase or decrease 
D)  increase

Question 7

Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

Accepted Answer

A) True 
 B)False

Question 8

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

Accepted Answer

A) True 
 B)False

Question 9

The number of days' sales in inventory is one means of expressing the relationship between the cost of goods sold and inventory.

Accepted Answer

A) True 
 B)False

Question 10

A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability. The amount of working capital immediately after payment is

Accepted Answer

A)  $845,000 
B)  $595,000 
C)  $720,000 
D)  $125,000 
A)  $845,000 
B)  $595,000 
C)  $720,000 
D)  $125,000

Question 11

An extraordinary item results from

Accepted Answer

A)  a segment of the business being sold. 
B)  corporate income tax being paid. 
C)  a change from one accounting method to another acceptable accounting method. 
D)  a transaction or event that is unusual and occurs infrequently. 
A)  a segment of the business being sold. 
B)  corporate income tax being paid. 
C)  a change from one accounting method to another acceptable accounting method. 
D)  a transaction or event that is unusual and occurs infrequently.

Question 12

Which of the following items appear on the corporate income statement before income from continuing operations?

Accepted Answer

A)  cumulative effect of a change in accounting principle 
B)  income tax expense 
C)  extraordinary gain 
D)  loss on discontinued operations 
A)  cumulative effect of a change in accounting principle 
B)  income tax expense 
C)  extraordinary gain 
D)  loss on discontinued operations

Question 13

A company reports the following:
   Determine the company's earnings per share on common stock.

Accepted Answer

The answer of A company reports the following:
  ...

Question 14

A company reports the following:
   Determine the (a) inventory turnover, and (b) number of days' sales in inventory. Round your answer to one decimal place.

Accepted Answer

The answer of A company reports the following:
  ...

Question 15

Prepare an Income Statement using the following data for Young Adventures for the year ended December 31, 2012:

Accepted Answer

The answer of Prepare an Income Statement using the following...

Question 16

The purpose of an audit is to

Accepted Answer

A)  determine whether or not a company is a good investment. 
B)  render an opinion on the fairness of the statements. 
C)  determine whether or not a company complies with corporate social responsibility. 
D)  determine whether or not a company is a good credit risk. 
A)  determine whether or not a company is a good investment. 
B)  render an opinion on the fairness of the statements. 
C)  determine whether or not a company complies with corporate social responsibility. 
D)  determine whether or not a company is a good credit risk.

Question 17

The following data are taken from the financial statements:

Accepted Answer

(a)
 @#IMG-DLM&_TB20

Question 18

Leveraging implies that a company

Accepted Answer

A)  contains debt financing. 
B)  contains equity financing. 
C)  has a high current ratio. 
D)  has a high earnings per share. 
A)  contains debt financing. 
B)  contains equity financing. 
C)  has a high current ratio. 
D)  has a high earnings per share.

Question 19

Which of the following should be reported net of the related income tax effect on the income statement?

Accepted Answer

A)  sale of an inventory item at a loss 
B)  loss due to sale of fixed assets 
C)  loss due to a discontinued operations of the business 
D)  sale of a temporary investment at a loss 
A)  sale of an inventory item at a loss 
B)  loss due to sale of fixed assets 
C)  loss due to a discontinued operations of the business 
D)  sale of a temporary investment at a loss

Question 20

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Accepted Answer

A) True 
 B)False

Exam 17: Financial Statement Analysis

The following data are taken from the financial statements:

When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item after income from continuing operations on the income statement.

The following data are taken from the balance sheet at the end of the current year. Determine the (a) working capital, (b) current ratio, and (c) quick ratio. Present figures used in your computations. Round ratios to the nearest tenth.

The Cash and Accounts Receivable for a company are provided below: Based on this information, what is the amount and percentage of increase or decrease that would be shown in a balance sheet with horizontal analysis?

An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to

Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

The number of days' sales in inventory is one means of expressing the relationship between the cost of goods sold and inventory.

A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability. The amount of working capital immediately after payment is

An extraordinary item results from

Which of the following items appear on the corporate income statement before income from continuing operations?

A company reports the following: Determine the company's earnings per share on common stock.

A company reports the following: Determine the (a) inventory turnover, and (b) number of days' sales in inventory. Round your answer to one decimal place.

Prepare an Income Statement using the following data for Young Adventures for the year ended December 31, 2012:

The purpose of an audit is to

The following data are taken from the financial statements:

Leveraging implies that a company

Which of the following should be reported net of the related income tax effect on the income statement?

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

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