ACC/561 ACC 561 Week 2 WileyPLUS Practice Quiz

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

Question 1

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

market value.

solvency.

profitability.

liquidity.

Question 2

Which of the following is a measure of liquidity?

Profit margin

Debt to equity ratio

Earnings per share

Working capital

Question 3

Current assets divided by current liabilities is known as the

current ratio.

profit margin.

capital structure.

working capital

Question 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?

75%

133%

33%

113%

Question 5

In analyzing financial statements, horizontal analysis is a

principle.

theory.

requirement.

tool.

Question 6

Comparative balance sheets

do not show a comparison of total stockholders' equity.

are usually prepared for at least two years.

are usually prepared for at least one year.

do not show both dollar amount and percentage changes.

Question 7

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?

50%

67%

20%

150%

Question 8

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

Intercompany.

Interregional.

Industry averages.

Intracompany.

Question 9

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%

Differential analysis

Ratio analysis

Vertical analysis

Horizontal analysis

Question 10

A common measure of profitability is the

current cash debt coverage ratio.

return on common stockholders' equity ratio.

debt to total assets.

current ratio.

Question 11

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

Return on total assets

Receivables turnover

Debt to total assets ratio

Current cash debt coverage ratio

Question 12

The current ratio is

calculated by dividing current liabilities by current assets.

calculated by subtracting current liabilities from 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.

Question 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.

12 years ago

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