ACC 561 Week 2 Quiz by sonal sharma

ACC 561 Week 2 Quiz By www.StudentWhiz.com

1. The relationship between current assets and current liabilities is important in evaluating a company's 

market value.



solvency.



profitability.



liquidity.

2. Which of the following is a measure of liquidity? 

Debt to equity ratio



Profit margin



Working capital



Earnings per shar

3. Current assets divided by current liabilities is known as the 

capital structure.



working capital



current ratio.



profit margin.

4. Danner Corporation reported net sales of $600,000, $680,000, and $800,000 in the years 2011, 2012, and 2013, respectively. If 2011 is the base year, what percentage do 2013 sales represent of the base? 

33%



133%



75%



113%

5 .An analyzing financial statements, horizontal analysis is a



theory.



requirement.



tool.



principle.

6. Comparative balance sheets 

are usually prepared for at least one year.



are usually prepared for at least two years.



do not show both dollar amount and percentage changes.



do not show a comparison of total stockholders' equity.

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7. Assume the following cost of goods sold data for a company: 2013 2012 2011

$1,500,000 1,200,000 1,000,000

If 2011 is the base year, what is the percentage increase in cost of goods sold from 2011 to 2013? • • • •

50% 67% 150% 20%

8. Comparisons of data within a company are an example of the following comparative basis: • • • •

Intercompany. Interregional. Industry averages. Intracompany.

9. The following schedule is a display of what type of analysis? Amount Percent Current assets $100,000 25% 300,000 75% Property, plant, and equipment Total assets $400,000 100% • • • •

Horizontal analysis Differential analysis Vertical analysis Ratio analysis

10. A common measure of profitability is the • • • •

current ratio. debt to total assets. current cash debt coverage ratio. return on common stockholders' equity ratio.

Want more details? Download now ACC 561 Week 5 Quiz 11. Which one of the following would be considered a long-term solvency ratio? 

Return on total assets



Current cash debt coverage ratio



Debt to total assets ratio



Receivables turnover

12. The current ratio is 

calculated by dividing current liabilities by current assets.



used to evaluate a company's liquidity and short-term debt paying ability.



used to evaluate a company's solvency and long-term debt paying ability.



calculated by subtracting current liabilities from current assets.

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13.Richards, Inc. has the following income statement (in millions): RICHARDS, INC. Income Statement For the Year Ended December 31, 2012 Net Sales $180 Cost of Goods Sold 60 Gross Profit 120 Operating Expenses 75 Net Income $ 45 Using vertical analysis, what percentage is assigned to net income? • • • •

A.100% B.75% C.25% D.None of the above.

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