Acc557 Financial Accounting: Week 11 Study Guide (Chapter 14) - Version 1

Note: Please compare the questions outlined below with your own questions to make sure it's the same. There are other versions.

Acc557 Financial Accounting
Week 11 Study Guide (Chapter 14) - Version 1

IFRS Multiple Choice Question 250
Under IFRS, other comprehensive income must be displayed (reported) in
the income statement.
a second income statement.
the retained earnings statement.
the equity section of the statement of financial position.

Multiple Choice Question 71
In performing a vertical analysis, the base for sales returns and allowances is
net sales.
total revenues.
sales discounts.
sales.

Multiple Choice Question 96
Ratios are used as tools in financial analysis
because they are prescribed by GAAP.
because they may provide information that is not apparent from inspection of the individual components of the ratio.
because even single ratios by themselves are quite meaningful.
instead of horizontal and vertical analyses.

Multiple Choice Question 106
A general rule to use in assessing the average collection period is that
it should not greatly exceed the credit term period.
it should not greatly exceed the discount period.
it can be any length as long as the customer continues to buy merchandise.
it should not exceed 30 days.

Multiple Choice Question 171
The acid-test ratio is also known as the
times interest earned ratio.
current ratio.
quick ratio.
fast ratio.

Multiple Choice Question 138
Star Corporation had net income of $300,000 and paid dividends to common stockholders of $40,000 in 2012. The weighted average number of shares outstanding in 2012 was 50,000 shares. Star Corporation's common stock is selling for $36 per share on the New York Stock Exchange.
Star Corporation's price-earnings ratio is
18 times.
6.9 times.
5.2 times.
6 times.

Multiple Choice Question 107
Inventory turnover is calculated by dividing
cost of goods sold by the beginning inventory.
cost of goods sold by the average inventory.
average inventory by cost of goods sold.
cost of goods sold by the ending inventory.

Multiple Choice Question 121
Town Company reported the following on its income statement:
Income before income taxes $750,000
Income tax expense 150,000
Net income $600,000
An analysis of the income statement revealed that interest expense was $100,000.Town Company's times interest earned was
6 times.
7.5 times.
5 times.
8.5 times.

Multiple Choice Question 161
If an item meets one (but not both) of the criteria for an extraordinary item, it
only needs to be disclosed in the footnotes of the financial statements.
is reported as an "other revenue or gain" or "other expense and loss," net of tax.
is reported at its gross amount as an "other revenue or gain" or "other expense or loss."
may be treated as sales revenue (if it is a gain) and as an operating expense (if it is a loss).

Multiple Choice Question 66
Vertical analysis is also called
ratio analysis.
trend analysis.
common size analysis.
horizontal analysis.

Multiple Choice Question 157
Each of the following is an extraordinary item except the
losses attributable to labor strikes.
effects of major casualties, if rare in the area.
expropriation of property by a foreign government.
effects of a newly enacted law or regulation.

Multiple Choice Question 87
Stout Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2012. The weighted average number of shares outstanding in 2012 was 50,000 shares. Stout Corporation's common stock is selling for $60 per share on the New York Stock Exchange. Stout Corporation's payout ratio for 2012 is
12.5%.
$4 per share.
25%.
20%.

Multiple Choice Question 89
The debt to total assets ratio measures
the proportion of interest paid relative to dividends paid.
the company's profitability.
whether interest can be paid on debt in the current year.
the percentage of the total assets provided by creditors.

Multiple Choice Question 104
A company has a receivables turnover of 10 times. The average receivables during the period are $500,000. What is the amount of net credit sales for the period?
$5,000,000
$50,000
$500,000
Cannot be determined from the information given

Multiple Choice Question 47
Comparisons of financial data made within a company are called
intercompany comparisons.
intramural comparisons.
intracompany comparisons.
interior comparisons.
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