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Managerial Accounting Exam 1 With 100% Correct And Verified Answers
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Managerial Accounting Exam 1 With 100% Correct And Verified Answers
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Managerial Accounting Exam 1 With 100% Correct And Verified AnswersD. Marketability - Correct Answer-Which one of the following is not a characteristic generally evaluated in analyzing financial statements?
A. Liquidity
B. Solvency
C. Profitability D. Marketability
C. is more meaningful if compared to other financial information - Correct Answer-In analyzing the financial statements of a company, a single item on the financial statements...
A. should be accompanied by a footnote
B. should be reported in bold-face type
C. is more meaningful if compared to other financial information
D. is significant only if it is large
D. Liquidity - Correct Answer-Short-term creditors are usually most interested in evaluating...
A. Marketability
B. Profitability
C. Solvency
D. Liquidity
C. profitability and solvency - Correct Answer-Long-term creditors are usually most interested in evaluating...
A. liquidity and profitability
B. solvency and marketability
C. profitability and solvency
D. liquidity and solvency
A. Profitability and solvency - Correct Answer-Stockholders are more interested in evaluating...
A. Profitability and solvency
B. Liquidity and solvency
C. Liquidity and profitability
D. Marketability and solvency
D. all of these choices are correct - Correct Answer-A stockholder is interested in the ability of a firm to...
A. pay consistent dividends.
B. appreciate in share price
C. survive over a long period. D. all of these choices are correct
A. tool - Correct Answer-In analyzing financial statements, horizontal analysis is a...
A. tool
B. requirement
C. principle
D. theory
D. minus the base year amount divided by the base year amount. - Correct Answer-The
formula for horizontal analysis of changes since the base period is the current year amount...
A. plus the base year amount divided by the base year amount.
B. divided by the base year amount.
C. minus the base year amount divided by the current year amount.
D. minus the base year amount divided by the base year amount.
D. 36.0% (1618400 - 1190000) / 1190000 = 36.0%) - Correct Answer-Assume the following cost of goods sold data for a company:
2019 - $1618400
2018 - $1420000
2017 - $1190000
If 2017 is the base year, what is the percentage increase in cost of goods sold from 2017 to 2019?
A. 83.8%
B. 119.3%
C. 73.5%
D. 36.0%
B. 51% (178.5/350 = 51%) - Correct Answer-Sheffield, Inc. has the following income statement (in millions):
Net Sales - $350
Cost of Goods Sold - 178.5
Gross Profit - 171.5
Operating Expenses 42
Net Income - $129.5
Using vertical analysis, what percentage is assigned to Cost of Goods Sold?
A. 49%
B. 51%
C. 100%
D. None of the above
C. total assets - Correct Answer-In performing a vertical analysis, the base for prepaid expenses is
A. prepaid expenses
B. total current assets
C. total assets D. total liabilities and stockholders' equity
C. net sales. - Correct Answer-In performing a vertical analysis, the base for cost of goods sold is...
A. total expenses.
B. total selling expenses
C. net sales.
D. total revenues
B. debt to assets ratio. - Correct Answer-Each of the following is a liquidity ratio except...
A. inventory turnover
B. debt to assets ratio.
C. acid-test ratio.
D. current ratio
A. expresses a mathematical relationship between two numbers. - Correct Answer-A ratio is calculated in the analysis of financial statements
A. expresses a mathematical relationship between two numbers.
B. shows the percentage increase from one year to another.
C. restates all items on a financial statement in terms of dollars of the same purchasing power.
D. is meaningful only if the numerator is greater than the denominator
D. short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash. - Correct Answer-A liquidity ratio measures the...
A. number of times interest is earned
B. income or operating success of an enterprise over a period of time.
C. ability of the enterprise to survive over a long period of time.
D. short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash.
A. how efficiently a company uses its assets to generate sales. - Correct Answer-Asset turnover measures...
A. how efficiently a company uses its assets to generate sales.
B. the portion of the assets that have been financed by creditors.
C. the overall rate of return on assets
D. how often a company replace its assets
C. the percentage of the total assets provided by creditors. - Correct Answer-The debt to assets ratio measures...
A. the company's profitability
B. the proportion of interest paid relative to dividends paid.
C. the percentage of the total assets provided by creditors.
D. whether interest can be paid on debt in the current year A. current ratio. - Correct Answer-A supplier to a company would be most interested in the company's...
A. current ratio.
B. asset turnover.
C. earnings per share.
D. profit margin.
D. because they may provide information that is not apparent from inspection of the individual components of the ratio - Correct Answer-Ratios are used as tools in financial
analysis...
A. instead of horizontal and vertical analysis
B. because they are prescribed by GAAP
C. because even single ratios by themselves are quite meaningful
D. because they may provide information that is not apparent from inspection of the individual components of the ratio
A. profit margin. - Correct Answer-A measure of the percentage of each dollar of sales that results in net income is...
A. profit margin.
B. return on assets.
C. return on common stockholders' equity
D. earnings per share
A. No effect - Correct Answer-Sheffield Company had $370000 of current assets and $146000 of current liabilities before borrowing $72000 from the bank with a 3-month notes payable. What effect did the borrowing transaction have on the amount of Sheffield Company's working capital?
A. No effect
B. $72,000 decrease
C. $72,000 increase
D. $144000 increase
B. decrease - Correct Answer-If equal amounts are added to the numerator and the denominator of the current ratio, which is greater than 1, the ratio will always...
A. increase
B. decrease
C. stays the same
D. equal zero
D. a low inventory turnover - Correct Answer-An aircraft company would most likely have...
A. low profit margin.
B. high volume
C. a high inventory turnover
D. a low inventory turnover
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