Accounting: Balance Sheet and Financial Statements

1509 Words Feb 27th, 2013 7 Pages
MULTIPLE CHOICE

1. The percentage analysis of increases and decreases in individual items in comparative financial statements is called a. vertical analysis b. solvency analysis c. profitability analysis d. horizontal analysis

2. Which of the following below generally is the most useful in analyzing companies of different sizes a. comparative statements b. common-sized financial statements c. price-level accounting d. audit report

3. The percent of fixed assets to total assets is an example of e. vertical analysis f. solvency analysis g. profitability analysis h. horizontal analysis
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4. An analysis in which all the components of an income statement
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. inventory . marketable securities . accounts receivable . cash

18. The numerator used to calculate accounts receivable turnover is . total sales . net sales . accounts receivable at year-end . average accounts receivable

19. An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to . decrease . remain the same . either increase or decrease . increase

20. Which of the following ratios provides a solvency measure that shows the margin of safety of noteholders or bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis? . ratio of fixed assets to long-term liabilities . ratio of net sales to assets . number of days' sales in receivables . rate earned on stockholders' equity

21. The number of times interest expense is earned is computed as . net income plus interest expense, divided by interest expense . income before income tax plus interest expense, divided by interest expense . net income divided by interest expense . income before income tax divided by interest expense

22. The current ratio is . used to evaluate a company's liquidity and short-term debt paying ability . is a solvency measure that indicated the margin of safety of a