Filters
Question type
Study Flashcards

Accrual accounting requires the use of many estimates, including:


A) Uncollectible accounts expense.
B) Warranty costs.
C) Assets' useful lives.
D) All of the other answers are correct.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

For 2012, Wylie Corporation reported after-tax net income of $1,100,000. During the year, the number of outstanding shares of 6% $100 par preferred stock remained constant at 5,000, and 500,000 shares of common stock were outstanding all year. The company's total stockholders' equity at December 31, 2012, was $10,500,000. Wylie's common stock was selling at $38 per share at the end of the year. All dividends for the year were paid, including a dividend of $1.50 per share to common stockholders. Required: Compute the following: (a) Earnings per share (b) Book value per share of common stock (c) Price-earnings ratio (d) Dividend yield

Correct Answer

verifed

verified

(a) Earnings per share = ($1,100,000 - 3...

View Answer

Which of the following is a factor involved in communicating useful information?


A) Attributes of the users
B) Purpose for which the information will be used
C) Process by which the information is analyzed
D) All of the other answers are correct.

E) B) and D)
F) A) and D)

Correct Answer

verifed

verified

Croatan Company's current ratio for 2012 was 1.42, which was slightly above the current ratio for similar companies in its industry. Croatan's quick ratio for 2012 was 0.68, which is substantially lower than for similar companies in its industry. What conclusion would you reach based on this information?

Correct Answer

verifed

verified

The primary difference between the curre...

View Answer

The study of an individual item or account over several accounting periods, such as months, quarters or years is known as:


A) Percentage analysis
B) Horizontal analysis
C) Vertical analysis
D) Ratio analysis

E) C) and D)
F) A) and B)

Correct Answer

verifed

verified

Jones Company has cash of $20,000, accounts receivable of $30,000, inventory of $16,000, and equipment of $50,000. Assuming current liabilities of $24,000, this company's working capital is:


A) $6,000.
B) $26,000.
C) $42,000.
D) $72,000.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

The accounting profession assumes that financial statement users have a reasonable knowledge of business.

A) True
B) False

Correct Answer

verifed

verified

The Destin Company reported net income of $50,000 on sales of $300,000. The company has total assets of $500,000 and total liabilities of $100,000. What is the company's return on equity ratio?


A) 10.0%
B) 12.5%
C) 16.7%
D) 50.0%

E) A) and C)
F) None of the above

Correct Answer

verifed

verified

Select the correct statement regarding vertical analysis.


A) Vertical analysis of the income statement involves showing each item as a percentage of sales.
B) Vertical analysis of the balance sheet involves showing each asset as a percentage of total assets.
C) Vertical analysis examines two or more items from the financial statements of one accounting period.
D) All of the other answers are correct.

E) A) and D)
F) A) and C)

Correct Answer

verifed

verified

Select the incorrect statement regarding the information disclosed in financial statements.


A) Financial statements should be detailed enough to answer any financial-related question an investor might have.
B) Some information disclosed in financial statements may be irrelevant to some users.
C) The costs of providing all possible information about a firm would be prohibitively high for the business.
D) When too much information is presented users may suffer from information overloaD.Financial statements can provide only highly summarized economic information. The costs to a company of providing excessively detailed information would be prohibitive. In addition, too much detail leads to information overload, the problem of having so much data that important information becomes obscured by trivial information.

E) None of the above
F) B) and C)

Correct Answer

verifed

verified

Which of the following is an objective of ratio analysis?


A) Assessing past performance.
B) Assessing the prospects for future performance.
C) Analyzing how a company finances its operations.
D) All of the other answers are correct.

E) All of the above
F) A) and B)

Correct Answer

verifed

verified

Which of the following statement is correct regarding the quick ratio?


A) The numerator for the quick ratio is current assets.
B) The numerator for the quick ratio is current assets minus inventory minus-prepaid expenses.
C) The quick ratio is also called the working capital ratio.
D) The quick ratio is a less conservative variation of the current ratio.

E) A) and C)
F) A) and B)

Correct Answer

verifed

verified

The Crestar Company reported net income of $100,000 on 20,000 outstanding common shares. Preferred dividends total $12,000. On the most recent trading day, the preferred shares sold at $50 and the common shares sold at $80. What is this company's current price-earnings ratio? (rounded)


A) 16
B) 18
C) 20
D) None of the other answers are correct.

E) A) and B)
F) All of the above

Correct Answer

verifed

verified

The following information is from the financial records of Norfolk Company for 2012: The following information is from the financial records of Norfolk Company for 2012: Required: Calculate the number of times interest is earned for Norfolk in 2012. Required: Calculate the number of times interest is earned for Norfolk in 2012.

Correct Answer

verifed

verified

Number of times interest is earned =
Ear...

View Answer

The current ratio is one of the most common measures of liquidity.

A) True
B) False

Correct Answer

verifed

verified

Which ratio would you use to examine a company's ability to pay its debts in the short term?


A) Earnings per share
B) Debt to assets ratio
C) Acid-test ratio
D) Return on equity

E) B) and D)
F) A) and B)

Correct Answer

verifed

verified

Which ratio measures the percentage of company's assets that are financed by debt?


A) Debt to equity
B) Asset turnover
C) Debt to assets ratio
D) Return on investment

E) C) and D)
F) A) and C)

Correct Answer

verifed

verified

In vertical analysis, each item is expressed as a percentage of:


A) Net sales on the income statement.
B) Net income on the income statement.
C) Total expenses on the income statement.
D) None of the other answers are correct.

E) B) and C)
F) A) and B)

Correct Answer

verifed

verified

The quick ratio although similar to the current ratio is more conservative.

A) True
B) False

Correct Answer

verifed

verified

Showing 121 - 139 of 139

Related Exams

Exam 1

An Introduction to Accounting

148 Questions

Exam 2

Accounting for Accruals and Deferrals

151 Questions

Exam 3

The Double-Entry Accounting System

156 Questions

Exam 4

Accounting for Merchandising Businesses

157 Questions

Exam 5

Accounting for Inventories

142 Questions

Exam 6

Internal Control and Accounting for Cash

140 Questions

Exam 7

Accounting for Receivables

145 Questions

Exam 8

Accounting for Long-Term Operational Assets

159 Questions

Exam 9

Accounting for Current Liabilities and Payroll

130 Questions

Exam 10

Accounting for Long-Term Debt

158 Questions

Exam 11

Proprietorships, Partnerships, and Corporations

153 Questions

Exam 12

Statement of Cash Flows

134 Questions

Show Answer