Acct Ch 14

Card Set Information

Author:
kppatel702
ID:
12774
Filename:
Acct Ch 14
Updated:
2010-04-01 16:50:16
Tags:
Managerial Accounting
Folders:

Description:
Exam II
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user kppatel702 on FreezingBlue Flashcards. What would you like to do?


  1. Why do managers analyze financial statements?

    A. To evaluate and control operations
    B. To evaluate vendors and customers
    C. To anticipate questions from shareholders and creditors
    D. All of the above
    D. All of the above
  2. Horizontal analysis analyzes

    A. Comparable companies
    B. Changes in expenses as a percent of total assets
    C. Changes in balances from one year to another
    D. Changes in expenses as a percentage of sales
    C. Changes in balances from one year to another
    (this multiple choice question has been scrambled)
  3. In connection with a company's annual report, MD&A stands for

    A. Monthly discounts and advertising
    B. Monthly depreciation and amortization
    C. More depreciation and amortization
    D. Management discussion and analysis
    D. Management discussion and analysis
    (this multiple choice question has been scrambled)
  4. Net income substantially higher then cash flow from operations may indicate

    A. Exceptional profitability
    B. That a company has a lot of depreciation expense
    C. Manipulation of income
    D. Excetional control of expenses
    C. Manipulation of income
    (this multiple choice question has been scrambled)
  5. The fact that the return on common stockholders' equity is higher than the return on total assets suggests that a company

    A. Has made good use of financial leverage
    B. Has funded asset acquisition primarily with debt
    C. Has excessive debt financing
    D. Has good control of operations
    A. Has made good use of financial leverage
    (this multiple choice question has been scrambled)
  6. A primary difference between the current ratio and the acid test ratio (quick ratio) is

    A. The current ratio takes into account depreciation expense
    B. The acid test ratio excludes inventory from the numerator
    C. The acid test ratio is computed using monthly data
    D. All of the above
    B. The acid test ratio excludes inventory from the numerator
    (this multiple choice question has been scrambled)
  7. Day sales in inventory is equal to

    A. Sales/ inventory turnover
    B. 365 x inventory/sales
    C. 365 x sales/inventory
    D. 365/ inventory turnover
    D. 365/ inventory turnover
    (this multiple choice question has been scrambled)
  8. Which of the folllowing items is not included in the calculation of income from operations?

    A. Gains on the sale of short term investments
    B. Interest income
    C. Interest expense
    D. None of the above is included in the calculation of income from operations
    D. None of the above is included in the calculation of income from operations
  9. List three types of decisions managers can make by analyzing financial statements
    By analyzing financial statements, managers decide what suppliers to use, what businesses to partner with, and how to pay off the firm’s debts.
  10. Explain what is meant by horizontal and vertical analysis of the balance sheet and the income statement
    Horizontal analysis consists of analyzing the dollar value and percentage changes in financial statements across time

    Vertical analysis consists of analyzing financial statements in comparison to a base amount. The base for the balance sheet is total assets, while net sales is the base for the income statement
  11. Suppose net income is much higher than cash flow from operations

What would you like to do?

Home > Flashcards > Print Preview