College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Explain why ratios that compare an income statement account with a balance sheet account should express the balance sheet account as an average of the beginning and ending balances.

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  • Which is the only ratio required to be reported on the face of a companys financial statements? What are the two ways the ratio is required to be reported?
    In general, how does the income statement help satisfy the objectives of financial reporting?
    In performing vertical analysis, we express each item in a financial statement as a percentage of a base amount. What base amount is commonly used for income statement accounts? For balance sheet accounts?
  • Financial ratios Draw the balance sheet and the income statement. Compare them with the items and figures on the statement
    When should an average amount be used for the numerator or denominator? When the denominator is a balance sheet item or items. When a ratio consists of an income statement item and a balance sheet item. When the numerator is a balance sheet item or items. When the numerator is an income statement item or items.
    Explain what ratio analysis is. List the five groups of ratios and identify, calculate, and interpret the key ratios in each group. Discuss each ratio’s relationship to the balance sheet and income statement.
  • What are the main ratios used to analyze financial statements?
    The primary focus of horizontal analysis isa. the income statement only.b. the balance sheet only.c. the percentage changes in line items on the comparative financial statements.d. the individual line items on the financial statements as a percentage of a related base,such as total sales or total assets.
    Expressing accounts receivable as a percentage of total assets is an example ofa. ratio analysis.b. vertical analysis.c. horizontal analysis.d. trend analysis.
  • can you help on the preperation of excel The income statement. The statement of retained earnings. The balance sheet. Ratios that can be calculated from the data presented.
    is the statement which indicates the relationship of different items of financial statement with some common item by expressing each item as a percentage of such common item a. Comparative statement b. Ratio statement c. Common size statement d. Trend Analysis
    choose: When a balance sheet amount is related to an income statement amount in comparing a ratio  a. The ratio losses its historical perspective because at the beginning of the year amount is combined with an end of the year amount.  b. The income statement amount should be converted to an average for the year.  c. Comparisons should be converted to market value  d. The balance sheet amount should be converted to an average for the year.
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