ACC/561 ACC 561 Week 2 WileyPLUS Practice Quiz

Description / Instructions: Complete the Week 2 WileyPLUS Practice Quiz.

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Question 1

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

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market value.

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solvency.

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profitability.

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liquidity.

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Question 2

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Which of the following is a measure of liquidity?

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Profit margin

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Debt to equity ratio

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Earnings per share

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Working capital

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Question 3

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Current assets divided by current liabilities is known as the

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current ratio.

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profit margin.

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capital structure.

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working capital

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Question 4

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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?

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75%

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133%

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33%

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113%

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Question 5

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In analyzing financial statements, horizontal analysis is a

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principle.

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theory.

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requirement.

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tool.

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Question 6

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Comparative balance sheets

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do not show a comparison of total stockholders' equity.

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are usually prepared for at least two years.

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are usually prepared for at least one year.

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do not show both dollar amount and percentage changes.

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Question 7

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Assume the following cost of goods sold data for a company:

2013	$1,500,000
2012	1,200,000
2011	1,000,000

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

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50%

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67%

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20%

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150%

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Question 8

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

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Intercompany.

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Interregional.

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Industry averages.

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Intracompany.

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Question 9

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The following schedule is a display of what type of analysis?

	Amount	Percent
Current assets	$100,000	25%
Property, plant, and equipment	300,000	75%
Total assets	$400,000	100%

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Differential analysis

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Ratio analysis

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Vertical analysis

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Horizontal analysis

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Question 10

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A common measure of profitability is the

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current cash debt coverage ratio.

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return on common stockholders' equity ratio.

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debt to total assets.

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current ratio.

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Question 11

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Which one of the following would be considered a long-term solvency ratio?

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Return on total assets

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Receivables turnover

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Debt to total assets ratio

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Current cash debt coverage ratio

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Question 12

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The current ratio is

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calculated by dividing current liabilities by current assets.

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calculated by subtracting current liabilities from current assets.

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

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

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Question 13

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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?

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A.100%

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B.75%

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C.25%

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D.None of the above.

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12 years ago

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