AC 202 Principles of Accounting II Name_____________________________ Park University Version D Quiz 3D-Chapter 17 Multiple Choice Questions (10 points each) Select the ONE,BEST Answer 1. F

AC 202 Principles of Accounting II Name_____________________________

Park University Version D

Quiz 3D-Chapter 17

Multiple Choice Questions (10 points each) Select the ONE,BEST Answer

1. Financial statement analysis:

A. Is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

B. Involves transforming accounting data into useful information for decision-making.

C. Helps users to make better decisions.

D. Helps to reduce uncertainty in decision-making.

E. All of these.

2. The building blocks of financial statement analysis include:

A. Liquidity and efficiency.

B. Solvency.

C. Profitability.

D. Market prospects.

E. All of these.

3. Standards for comparisons in financial statement analysis include:

A. Intracompany standards.

B. Competitors’ standards.

C. Industry standards.

D. Guidelines (rules of thumb).

E. All of these.

4. Horizontal analysis:

A. Is a method used to evaluate changes in financial data across time.

B. Is also called vertical analysis.

C. Is the presentation of financial ratios.

D. Is a tool used to evaluate financial statement items relative to industry statistics.

E. Evaluates financial data across industries.

Problem (60 points) Show All Work!!!!!!

Selected balances from a company’s financial statements are shown below. Calculate the following ratios for 2012:

(a) accounts receivable turnover

(b) inventory turnover

(c) days’ sales uncollected

(d) days’ sales in inventory

(e) profit margin.

(f) return on total assets.

Dec 31 Dec 31 for the

2012 2011 Year 2012

Accounts Receivable ………………….. 27,000 $24,000

Merchandise inventory………………… 25,000 20,000

Total Assets……………………………. 296,000 244,000

Accounts Payable……………………… 26,000 32,000

Salaries Payable……………………….. 3,000 4,400

Sales (all on credit)……………………… $312,000

Cost of goods sold……………………… 165,600

Salaries expense……………………….. 48,000

Other expenses………………………… 75,000

Net Income…………………………….. 24,000

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