Question 1

The current ratio is given by:

Accepted Answer

A)  Current assets divided by non-current assets.
B)  Current assets divided by total assets.
C)  Current assets divided by current liabilities.
D)  Current assets divided by total liabilities.E) A) and B)
F) A) and C)

Question 2

-Shareholders' equity

Accepted Answer

Total debt + Total equity = To...

Question 3

Intangible assets usually are reported in the balance sheet as current assets.

Accepted Answer

A) True 
 B)False

Question 4

The balance sheet reports a company's financial position at a point in time.

Accepted Answer

A) True 
 B)False

Question 5

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken.
-$\begin{array}{lccc}
& \text { Current ratio } & \text { Acid-test ratio } & \text { Total debt-to-equity ratio } \
\text { Record annual depreciation on office } \\text { equipment } 
\end{array}$

Accepted Answer

The answer of  Indicate whether each of the actions...

Question 6

The Management Discussion and Analysis section of the annual report can best be described as:

Accepted Answer

A)  Frank but objective.
B)  Independent but precise.
C)  Legalistic and lengthy.
D)  Biased but informative.E) C) and D)
F) A) and B)

Question 7

What would Symphony report as total assets?

Accepted Answer

A)  $2,338.
B)  $2,323.
C)  $2,318.
D)  $2,303.Total assets: ($680 20)  + ($920 80)  + 34 + 50 + 30 + 16 + 150 + 450 + 5 + 20 + 8 + 40 = $2,303E) All of the above
F) A) and D)

Question 8

Red Onion Restaurant classifies a six-month prepaid insurance policy as a current asset. Its rationale is based on:

Accepted Answer

A)  Materiality.
B)  Operating cycle.
C)  Definition.
D)  Liquidity.E) All of the above
F) C) and D)

Question 9

The balance of net receivables represents the amount expected to be collected.

Accepted Answer

A) True 
 B)False

Question 10

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken.
-$\begin{array}{cccc} 
& \text { Current ratio } & \text { Acid-test ratio } & \text { Total debt-to-equity ratio } \
\text { Purchase of inventorv on account } 
\end{array}$

Accepted Answer

The answer of  Indicate whether each of the actions...

Question 11

Lack of long-term solvency refers to:

Accepted Answer

A)  Risk of non-payment relative to liabilities in the capital structure.
B)  The length of time before long-term debt becomes due.
C)  The ability to refinance long-term debt when it becomes due.
D)  Long-term assets.E) None of the above
F) A) and B)

Question 12

What would Symphony report as total shareholders' equity?

Accepted Answer

A)  $548.
B)  $808.
C)  $838.
D)  $778.Total shareholders' equity: $485 + 15 + 48 120 + 380 = $808E) A) and C)
F) B) and D)

Question 13

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken.
-$\begin{array}{lccc}
 & \text { Current ratio } & \text { Acid-test ratio } & \text { Total debt-to-equity ratio } \
\text { Refinancing currently-maturing debt }\\text { for five more years }
\end{array}$

Accepted Answer

The answer of  Indicate whether each of the actions...

Question 14

Horizontal analysis involves expressing each item in the financial statements as a percentage of an appropriate total, or base amount, within the same year.

Accepted Answer

A) True 
 B)False

Question 15

Compute the return on shareholders' equity ratio for Marjoram Company.

Accepted Answer

$73,080 / ($70,000 +...

Question 16

The fourth paragraph of the audit report:

Accepted Answer

A)  Provides the auditors' opinion on the fairness of the financial statements.
B)  Provides the auditor's opinion on the effectiveness of internal control.
C)  Describes the scope of the audit.
D)  States management's responsibility for the financial statements.E) A) and B)
F) A) and C)

Question 17

All current assets are either cash or assets that will be converted into cash or consumed within twelve months or the operating cycle, if that is longer than one year.

Accepted Answer

A) True 
 B)False

Question 18

HHF's times interest earned ratio is:

Accepted Answer

A)  3.47.
B)  1.73.
C)  2.47.
D)  10.0.Times interest earned ratio:125/$36 = 3.47E) A) and B)
F) B) and D)

Question 19

Using an example, discuss the techniques that analysts use to transform accounting numbers into more useful forms.

Accepted Answer

Analysts convert accounting numbers into...

Question 20

-Current assets

Accepted Answer

Current assets (Ca./Current Liabilities ...

Exam 3: The Balance Sheet and Financial Disclosures

Compute the return on shareholders' equity ratio for Marjoram Company.

Correct Answer
verified
$73,080 / ($70,000 +...
View Answer

Correct Answer
verified

Correct Answer
verified

Using an example, discuss the techniques that analysts use to transform accounting numbers into more useful forms.

Correct Answer
verified
Analysts convert accounting numbers into...
View Answer

The balance sheet reports a company's financial position at a point in time.

Correct Answer
verified

What would Symphony report as total shareholders' equity?

Correct Answer
verified

Intangible assets usually are reported in the balance sheet as current assets.

Correct Answer
verified

HHF's times interest earned ratio is:

Correct Answer
verified

All current assets are either cash or assets that will be converted into cash or consumed within twelve months or the operating cycle, if that is longer than one year.

Correct Answer
verified

The Management Discussion and Analysis section of the annual report can best be described as:

Correct Answer
verified

What would Symphony report as total assets?

Correct Answer
verified

Lack of long-term solvency refers to:

Correct Answer
verified

Red Onion Restaurant classifies a six-month prepaid insurance policy as a current asset. Its rationale is based on:

Correct Answer
verified

Correct Answer
verified

The current ratio is given by:

Correct Answer
verified

The balance of net receivables represents the amount expected to be collected.

Correct Answer
verified

The fourth paragraph of the audit report:

Correct Answer
verified

-Current assets

Correct Answer
verified
Current assets (Ca./Current Liabilities ...
View Answer

Horizontal analysis involves expressing each item in the financial statements as a percentage of an appropriate total, or base amount, within the same year.

Correct Answer
verified

-Shareholders' equity

Correct Answer
verified
Total debt + Total equity = To...
View Answer

Exam 3: The Balance Sheet and Financial Disclosures

Compute the return on shareholders' equity ratio for Marjoram Company.

Correct Answerverified$73,080 / ($70,000 +...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Using an example, discuss the techniques that analysts use to transform accounting numbers into more useful forms.

Correct AnswerverifiedAnalysts convert accounting numbers into...View AnswerShow Answer

The balance sheet reports a company's financial position at a point in time.

Correct AnswerverifiedShow Answer

What would Symphony report as total shareholders' equity?

Correct AnswerverifiedShow Answer

Intangible assets usually are reported in the balance sheet as current assets.

Correct AnswerverifiedShow Answer

HHF's times interest earned ratio is:

Correct AnswerverifiedShow Answer

All current assets are either cash or assets that will be converted into cash or consumed within twelve months or the operating cycle, if that is longer than one year.

Correct AnswerverifiedShow Answer

The Management Discussion and Analysis section of the annual report can best be described as:

Correct AnswerverifiedShow Answer

What would Symphony report as total assets?

Correct AnswerverifiedShow Answer

Lack of long-term solvency refers to:

Correct AnswerverifiedShow Answer

Red Onion Restaurant classifies a six-month prepaid insurance policy as a current asset. Its rationale is based on:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The current ratio is given by:

Correct AnswerverifiedShow Answer

The balance of net receivables represents the amount expected to be collected.

Correct AnswerverifiedShow Answer

The fourth paragraph of the audit report:

Correct AnswerverifiedShow Answer

-Current assets

Correct AnswerverifiedCurrent assets (Ca./Current Liabilities ...View AnswerShow Answer

Horizontal analysis involves expressing each item in the financial statements as a percentage of an appropriate total, or base amount, within the same year.

Correct AnswerverifiedShow Answer

-Shareholders' equity

Correct AnswerverifiedTotal debt + Total equity = To...View AnswerShow Answer

Correct Answer
verified
$73,080 / ($70,000 +...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Analysts convert accounting numbers into...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Current assets (Ca./Current Liabilities ...
View Answer

Correct Answer
verified

Correct Answer
verified
Total debt + Total equity = To...
View Answer