Question 1

Which of the following statements is true?

Accepted Answer

A)  The debt-to-assets ratio requires only information found on the balance sheet.
B)  The net profit margin ratio requires only information found on the balance sheet.
C)  The asset turnover ratio requires only information found on the income statement.
D)  The debt-to-equity ratio requires only information found on the income statement.E) None of the above
F) A) and B)

Question 2

Stock price data can be included in the annual report.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 3

Accounting information serves a valuation function when it is used by:

Accepted Answer

A)  managers to evaluate net income and taxes.
B)  directors to evaluate net income and taxes.
C)  government officials to evaluate net income and taxes.
D)  Investors in making their decision to buy,hold or sell the company's stock.E) A) and B)
F) All of the above

Question 4

On January 1,2011,a company has assets of $16 billion and shareholders' equity of $8 billion.On January 1,2012,the same company has assets of $20 billion and shareholders' equity of $9 billion.During 2011,the company had total sales revenue of $900 million and total expenses of $700 million.If the company doesn't have other sources of revenue,its net profit margin during 2011 is:

Accepted Answer

A)  0.01
B)  0.013
C)  0.22
D)  0.022E) B) and C)
F) C) and D)

Question 5

All other things equal,in which of the following cases would an analyst rank the company most favourably?

Accepted Answer

A)  The company has the highest debt-to-assets ratio in the industry as well as the highest profit margin and asset turnover ratio.
B)  The company has the highest debt-to-assets ratio in the industry as well as the highest profit margin while its asset turnover ratio is the lowest.
C)  The company has the lowest debt-to-assets ratio in the industry as well as the lowest asset turnover ratio while its profit margin is the highest.
D)  The company has the lowest debt-to-assets ratio in the industry as well as the highest profit margin and asset turnover ratio.E) B) and D)
F) A) and C)

Question 6

At the end of last year,Cessa Company had total assets in the amount of $4,000,000 and total liabilities in the amount of $3,000,000.The company sold stock to new shareholders at the beginning of the current year for $1,000,000.As a direct result of this transaction,the:

Accepted Answer

A)  debt-to-assets ratio will decrease.
B)  asset turnover ratio will increase.
C)  net profit margin ratio will increase.
D)  net profit margin ratio will decrease.E) A) and B)
F) A) and C)

Question 7

What are the four elements of a business model in proper order?

Accepted Answer

A)  Produce net income,invest in assets,generate revenues,obtain financing
B)  Generate revenues,invest in assets,obtain financing,produce net income
C)  Obtain financing,invest in assets,generate revenues,produce net income.
D)  Obtain financing,generate revenues,invest in assets,produce net incomeE) A) and C)
F) B) and D)

Question 8

Accounting information serves a contracting function when it is used by:

Accepted Answer

A)  creditors to manage financial agreements.
B)  government officials to regulate the business and its financial records.
C)  analysts to assess business risks.
D)  investors to vote on company policies.E) None of the above
F) A) and B)

Question 9

Which of the following misstatements would cause the asset turnover ratio to be overstated?

Accepted Answer

A)  Capitalizing costs that should have been expensed.
B)  Failing to adjust for amortization in the current period.
C)  Failing to accrue income taxes of the current period.
D)  None of the above.E) All of the above
F) C) and D)

Question 10

When ratios are calculated from information obtained from separate financial statements,they are usually expressed as percentages.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 11

Further information about financial data,accounting methods,and financial statements is included in what part of the annual report?

Accepted Answer

A)  The balance sheet.
B)  The unaudited condensed quarterly data.
C)  The notes to the financial statements.
D)  The summarized financial data.E) A) and D)
F) A) and C)

Exam 5: Fraud,internal Control,and Cash

Which of the following misstatements would cause the asset turnover ratio to be overstated?

Correct Answer
verified

Correct Answer
verified

Stock price data can be included in the annual report. BT: Knowledge

Correct Answer
verified

When ratios are calculated from information obtained from separate financial statements,they are usually expressed as percentages. BT: Knowledge

Correct Answer
verified

All other things equal,in which of the following cases would an analyst rank the company most favourably?

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

At the end of last year,Cessa Company had total assets in the amount of $4,000,000 and total liabilities in the amount of $3,000,000.The company sold stock to new shareholders at the beginning of the current year for $1,000,000.As a direct result of this transaction,the:

Correct Answer
verified

Further information about financial data,accounting methods,and financial statements is included in what part of the annual report?

Correct Answer
verified

What are the four elements of a business model in proper order?

Correct Answer
verified

Accounting information serves a contracting function when it is used by:

Correct Answer
verified

Accounting information serves a valuation function when it is used by:

Correct Answer
verified

Exam 5: Fraud,internal Control,and Cash

Which of the following misstatements would cause the asset turnover ratio to be overstated?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Stock price data can be included in the annual report. BT: Knowledge

Correct AnswerverifiedShow Answer

When ratios are calculated from information obtained from separate financial statements,they are usually expressed as percentages. BT: Knowledge

Correct AnswerverifiedShow Answer

All other things equal,in which of the following cases would an analyst rank the company most favourably?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

At the end of last year,Cessa Company had total assets in the amount of $4,000,000 and total liabilities in the amount of $3,000,000.The company sold stock to new shareholders at the beginning of the current year for $1,000,000.As a direct result of this transaction,the:

Correct AnswerverifiedShow Answer

Further information about financial data,accounting methods,and financial statements is included in what part of the annual report?

Correct AnswerverifiedShow Answer

What are the four elements of a business model in proper order?

Correct AnswerverifiedShow Answer

Accounting information serves a contracting function when it is used by:

Correct AnswerverifiedShow Answer

Accounting information serves a valuation function when it is used by:

Correct AnswerverifiedShow 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