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Unusual items affecting the prior period's income statement consist of changes in or errors in applying accounting principles.

A) True
B) False

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The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets Liabilities and Stockholders' Equity Income Statement -Using the data provided for Diane Company,what is the price-earnings ratio? A) 8.0 times B) 2.5 times C) 4.0 times D) 6.0 times Liabilities and Stockholders' Equity The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets Liabilities and Stockholders' Equity Income Statement -Using the data provided for Diane Company,what is the price-earnings ratio? A) 8.0 times B) 2.5 times C) 4.0 times D) 6.0 times Income Statement The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets Liabilities and Stockholders' Equity Income Statement -Using the data provided for Diane Company,what is the price-earnings ratio? A) 8.0 times B) 2.5 times C) 4.0 times D) 6.0 times The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets Liabilities and Stockholders' Equity Income Statement -Using the data provided for Diane Company,what is the price-earnings ratio? A) 8.0 times B) 2.5 times C) 4.0 times D) 6.0 times -Using the data provided for Diane Company,what is the price-earnings ratio?


A) 8.0 times
B) 2.5 times
C) 4.0 times
D) 6.0 times

E) C) and D)
F) A) and B)

Correct Answer

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Based on the following data for the current year,what is the inventory turnover? Based on the following data for the current year,what is the inventory turnover? A) 2.7 B) 9.7 C) 2.5 D) 3.0


A) 2.7
B) 9.7
C) 2.5
D) 3.0

E) None of the above
F) A) and D)

Correct Answer

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Match each definition that follows with the term (a-h) it defines. -Measures the risk that interest payments will not be made if earnings decrease


A) Solvency
B) Leverage
C) Times interest earned
D) Horizontal analysis
E) Vertical analysis
F) Common-sized financial statements
G) Current position analysis
H) Profitability analysis

I) F) and G)
J) E) and H)

Correct Answer

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Balance sheet and income statement data indicate the following:​ Balance sheet and income statement data indicate the following:​ Based on the data presented,what is the times interest earned ratio? (Round to one decimal point.) A) 1.5 B) 6.4 C) 6.5 D) 5.5 Based on the data presented,what is the times interest earned ratio? (Round to one decimal point.)


A) 1.5
B) 6.4
C) 6.5
D) 5.5

E) None of the above
F) All of the above

Correct Answer

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Match each definition that follows with the term (a-h) it defines. -Useful for comparing one company to another or to industry averages


A) Solvency
B) Leverage
C) Times interest earned
D) Horizontal analysis
E) Vertical analysis
F) Common-sized financial statements
G) Current position analysis
H) Profitability analysis

I) A) and B)
J) B) and E)

Correct Answer

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CorpCo gathered the following information as of the end of the current fiscal year:​​ CorpCo gathered the following information as of the end of the current fiscal year:​​ What is CorpCo's dividend yield? Write your answer as a percent,rounded to one decimal place. What is CorpCo's dividend yield? Write your answer as a percent,rounded to one decimal place.

Correct Answer

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CorpCo's dividend yield is 21....

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When you are interpreting financial ratios,it is useful to compare a company's ratios to the same ratios from a prior period or to the ratios of another company in the same industry.

A) True
B) False

Correct Answer

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Short-term creditors are typically most interested in analyzing a company's


A) marketability
B) profitability
C) operating results
D) liquidity

E) None of the above
F) B) and C)

Correct Answer

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The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets Liabilities and Stockholders' Equity Income Statement -Using the data provided for Diane Company,what is the return on total assets? A) 10% B) 8% C) 0.1% D) 1% Liabilities and Stockholders' Equity The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets Liabilities and Stockholders' Equity Income Statement -Using the data provided for Diane Company,what is the return on total assets? A) 10% B) 8% C) 0.1% D) 1% Income Statement The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets Liabilities and Stockholders' Equity Income Statement -Using the data provided for Diane Company,what is the return on total assets? A) 10% B) 8% C) 0.1% D) 1% The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets Liabilities and Stockholders' Equity Income Statement -Using the data provided for Diane Company,what is the return on total assets? A) 10% B) 8% C) 0.1% D) 1% -Using the data provided for Diane Company,what is the return on total assets?


A) 10%
B) 8%
C) 0.1%
D) 1%

E) A) and D)
F) C) and D)

Correct Answer

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Use the information below for Privett Company to answer the questions that follow. ​ Use the information below for Privett Company to answer the questions that follow. ​ -Based on the data for Privett Company,what is the quick ratio,rounded to one decimal point? A) 1.7 B) 2.9 C) 1.1 D) 1.0 -Based on the data for Privett Company,what is the quick ratio,rounded to one decimal point?


A) 1.7
B) 2.9
C) 1.1
D) 1.0

E) None of the above
F) All of the above

Correct Answer

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A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability.The amount of working capital immediately after payment is


A) $845,000
B) $595,000
C) $720,000
D) $125,000

E) A) and B)
F) A) and C)

Correct Answer

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A decrease in the ratio of liabilities to stockholders' equity indicates an improvement in the margin of safety for creditors.

A) True
B) False

Correct Answer

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Comparative financial statements are designed to compare the financial statements of two or more corporations.

A) True
B) False

Correct Answer

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Use the information below for Harding Company to answer the questions that follow. ​ Use the information below for Harding Company to answer the questions that follow. ​ -Based on the data for Harding Company,what is the amount of quick assets? A) $205,000 B) $203,000 C) $131,000 D) $66,000 -Based on the data for Harding Company,what is the amount of quick assets?


A) $205,000
B) $203,000
C) $131,000
D) $66,000

E) B) and C)
F) B) and D)

Correct Answer

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The following data are taken from the financial statements:​​ The following data are taken from the financial statements:​​ Determine for the current year: (a) Return on total assets (b) Return on stockholders' equity (c) Return on common stockholders' equity (d) Earnings per share on common stock (e) Price-earnings ratio on common stock (f) Dividend yield​The current market price per share of common stock is $25.​Round dollar values to two decimal places and other final answers to one decimal place. Determine for the current year: (a) Return on total assets (b) Return on stockholders' equity (c) Return on common stockholders' equity (d) Earnings per share on common stock (e) Price-earnings ratio on common stock (f) Dividend yield​The current market price per share of common stock is $25.​Round dollar values to two decimal places and other final answers to one decimal place.

Correct Answer

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Based on the following data,what is the accounts receivable turnover? Based on the following data,what is the accounts receivable turnover? A) 17.5 B) 2.6 C) 20.0 D) 15.5


A) 17.5
B) 2.6
C) 20.0
D) 15.5

E) None of the above
F) All of the above

Correct Answer

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What information is generally included in the Management's Discussion and Analysis (MD&A)section of a corporate annual report?

Correct Answer

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The MD&A section typically includes:Mana...

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Current position analysis is used by short-term creditors to assess how quickly they will be repaid.

A) True
B) False

Correct Answer

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Match each definition that follows with the term (a-h) it defines. -The percentage analysis of the relationship of each component in a financial statement to a total within the statement


A) Solvency
B) Leverage
C) Times interest earned
D) Horizontal analysis
E) Vertical analysis
F) Common-sized financial statements
G) Current position analysis
H) Profitability analysis

I) E) and H)
J) B) and E)

Correct Answer

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