Financial Statement Test
____________ is/are the excess of expenses over revenue for a given period.
A ______________ involves comparing a given firm's ratios with those of other firms for a particular period.
A __________________ involves comparing the changes in a firm's ratios over a multiple-year period.
A company wants to increase its rate of return on assets from 8 percent to 14 percent. It is believed that the firm's total assets turnover of .667 cannot be easily increased at the present time. W...
A creditor's claim on the resources of the company is called ____________.
Assume that the current ratio of XYZ Company is 2.5:1. What effect would an equal dollar increase in current assets and current liabilities have on the current ratio?
Assume that the debt-equity ratio of XYZ Company is .5 to 1. If the company issued a long-term note in the purchase of some land, what effect would this transaction have on the debt-equity ratio?
Comparisons of a given firm's ratios with those of other firms for a particular period is referred to as ____________________.
During the year, XYZ Company issued additional common stock. This transaction is an example of which of the following?
During the year, XYZ Company sold one of its warehouses for $250,000 cash. This transaction is an example of which of the following?
Economic resources that have the potential or ability to provide future services or benefits to the firm are called _________________.
Financial leverage can increase the return to common shareholders as long as ______________.
Financial statements that are prepared using a particular set of assumptions are called ___________________.
If a company's rate of return on assets is 20 percent and the profit margin percentage is 5 percent, the company's total assets turnover must be which of the following?
In computing the quick ratio, which of the following items is customarily excluded from the numerator?
In computing the rate of return on assets, interest expense net of income tax savings is added to net income. Assume that XYZ Company has interest expense of $20 million and net income of $50 milli...
In computing the rate of return on common shareholders' equity, do dividends on preferred stock have to be added to net income?
In the _____________, earnings per share amount are compared with the market price of the stock.
Outflows of assets used up in generating revenue are called ______________.
Revenues are a measure of the inflows of assets (or reductions in liabilities) from selling goods and providing services to customers. Which of the following is NOT a revenue transaction?
The ____________ is an agency of the federal government and has the legal authority to set acceptable accounting standards in the United States.
The ____________ is the excess of expenses over revenue for a given period.
The ____________ is the excess of revenues over expenses for a particular period.
The ____________ is the financial statement that presents an overall view of a company's financial position as of a given date.
The _____________ considers the availability of liquid assets to cover various levels of debt. For a financially healthy firm, the ratio should be 20 percent or more.
The _____________ states that if bond indentures require periodic repayments of principal on long-term liabilities, the denominator of the interest coverage ratio might include such repayments.
The ______________ is a private sector group that has been given the responsibility of establishing acceptable accounting standards in the United States.
The ______________ is a useful measure for assessing a firm's performance in using assets to generate earnings.
The ______________ is computed by dividing cash flow from operations by average current liabilities.
The ______________ is computed by dividing net income attributable to common stock by the average number of common shares outstanding during the period.
The ______________ is the sequence of activities in which inventory is purchased on account from suppliers, inventory is sold on account to customers, customers pay the amounts due, and suppliers a...
The _______________ indicates the proportion of total capital supplied by creditors.
The _______________ is a measure of a firm's ability to control the level of costs, or expenses, relative to sales.
The _______________ is the financial statement that presents the results of earnings activity over time.
The _______________ is used to indicate the relative protection of bondholders and to assess the probability of a firm's failing to meet required interest payments.
The _______________ provides a measure of the sales generated for each dollar invested in fixed assets.
The _______________ reports the net cash flows relating to operating, investing, and financing activities for a particular period of time.
The _______________ represent/s the earnings, or profits, in excess of dividends distributed to shareholders that have been realized by the firm since its formation.
The ________________ generally includes cash, marketable securities, and accounts receivable in its numerator.
The ________________ indicates the length of the period between the purchase of inventory on account and the payment of cash to suppliers.
The ________________ indicates the number of times that the average inventory has been sold during a particular period.
The _______________is supposed to indicate the ability of the firm to meet its current obligations.
The phenomenon of common shareholders trading at extra risk for a potentially higher return is called __________________.
The primary source of cash for most firms should be _______________.
The Rate of Return on Assets can be disaggregated into two other ratios. Which of the following is one of the two ratios?
When an auditor feels that an opinion cannot be expressed as to the fairness of a company's financial statements as a whole, he issues a/an ________________ .
Which of the following approaches does the Financial Accounting Standards Board follow in establishing generally accepted accounting principles?
Which of the following can be described as "claims on resources that result from benefits previously received by the company, and which require that a specified amount be paid on a specified date"?
Which of the following does NOT describe an expense?
Which of the following equations is incorrect?
Which of the following financial statements provides information about economic resources and claims on those resources?
Which of the following financial statements provides information about inflows and outflows of cash?
Which of the following is NOT a current asset?
Which of the following is NOT a current liability?
Which of the following is NOT a measure of profitability?
Which of the following is NOT used to assess short-term liquidity risk?
Which of the following organizations, despite the fact that it has no legal authority, has played a role in developing acceptable accounting principles worldwide?
Which of the following ratios assesses the firm's operating performance independently of financing decisions?
Which of the following ratios indicates the proportion of a firm's long-term capital that is provided by creditors?
Which of the following ratios measures the firm's performance in generating earnings that are assignable to the common shareholders' equity?
Which of the following ratios provides a measure of the sales generated for each dollar invested in assets?
Which of the following ratios uses sales in its numerator?
Which of the following ratios would NOT be used to assess a firm's long-term liquidity risk?
Which of the following ratios would probably NOT be used to analyze the Total Assets Turnover Ratio?
Which of the following represents a measure of the assets provided by the original shareholder in exchange for an ownership interest in the firm?
Which of the following terms refers to the "nearness of cash" of a firm's assets?
Which of the following terms refers to the practice of using debt and preferred stock for financing in order to increase the return to the common shareholders' equity?
Which of the following transactions does NOT result in an inflow of cash?
Which of the following transactions does NOT result in an outflow of cash?
Which of the following would not appear on a Balance Sheet?
Which of the following would NOT appear on an Income Statement?
Which of the following would NOT be used to evaluate a firm's operating cycle?
XYZ Company reports total assets and total liabilities of $425,000 and $200,000, respectively, at the conclusion of its first year of business. The company earned $95,000 during the first year and ...
XYZ Company reports total assets and total shareholders' eQuity of $375,000 and $220,000, respectively, at the end of its first year of business. The company reported earnings of $100,000 and distr...
XYZ Company sells on credit with terms of Net 30 days. If the company's credit policy and collection activity are working efficiently, how many times should the company's Accounts Receivable turn i...
XYZ Company's retained earnings increased by $100,000 during the year. Also during the year, dividends totaling $22,500 were declared and paid to shareholders. What was XYZ Company's net income for...