Filters
Question type
Study Flashcards

Refer to the summary financial information for Momentum Clothing Distributors. Which of the following statements is true?


A) The company's level of financing risk was greater in 2011 than it was in 2010.
B) In comparison to 2010, the company became less efficient in 2011 in generating revenues from its investment in assets.
C) Despite the increase in sales in 2011, the company controlled its expenses just as well as it had in 2009.
D) The company's level of financing risk was less in 2010 than it was in 2009.

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

Correct Answer

verifed

verified

The SEC requires public companies to electronically file certain reports with the SEC in order to ensure sufficient, relevant information is available to investors.

A) True
B) False

Correct Answer

verifed

verified

Which of the following statements is true?


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-assets ratio and the asset turnover ratio are used to evaluate profitability of the company.

E) All of the above
F) B) and D)

Correct Answer

verifed

verified

The asset turnover ratio and the net profit margin ratio can both be used to evaluate the solvency of a company.

A) True
B) False

Correct Answer

verifed

verified

On January 1, 2011, a company has assets of $16 billion and stockholders' equity of $8 billion. On January 1, 2009, the same company has assets of $20 billion and stockholders' equity of $9 billion. During 2011, the Company had total sales revenue of $9 billion and total expenses of $7 billion. If the company doesn't have other sources of revenue, its net profit margin during 2011 is:


A) 0.01
B) 0.013
C) 0.22
D) 0.022

E) All of the above
F) A) and D)

Correct Answer

verifed

verified

Which of the following is true concerning cross-sectional analysis?


A) Cross-sectional analysis involves the comparison of a company's results to its competitors' results.
B) Cross-sectional analysis compares results for a single company to itself over time.
C) Cross-sectional analysis does not compare different size companies in the same industry.
D) Cross-sectional analysis is the same as financial ratio analysis.

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

Correct Answer

verifed

verified

Which of the following is not true concerning the basic business model?


A) Contains the activities of obtaining financing in order to invest in assets.
B) Contains the activities of investing in assets to be used to generate revenues.
C) Contains the activities of generating revenues which lead to net income.
D) Includes the financial measures of total liabilities, total stockholders' equity and other measures used as

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

Correct Answer

verifed

verified

When calculating a ratio that uses period data and point-in-time data, analysts typically use the :


A) average value for the period data.
B) starting point for the point-in-time data.
C) ending point for the period data.
D) average value for the point-in-time data.

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

Correct Answer

verifed

verified

An audit report expressing an unqualified opinion is generally desired by the company presenting its financial statements.

A) True
B) False

Correct Answer

verifed

verified

The Sarbanes-Oxley Act (SOX) grants legal protection to 'whistle-blowers.'

A) True
B) False

Correct Answer

verifed

verified

A company has assets of $10 million and liabilities of $7 million. Liabilities include $4 million in accounts payable, $2 million in long-term notes payable and $1 million in other non-current liabilities. If a financial web site uses long-term debt rather than total liabilities to calculate the company's debt-to-assets ratio, the web site will report a ratio of:


A) 0.5, which would correctly state financing risk.
B) 0.4, which would suggest more financing risk than it actually has.
C) 0.3, which would suggest less financing risk than it actually has.
D) 0.3, which would suggest more financing risk than it actually has.

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

Correct Answer

verifed

verified

Form 10-Q is a quarterly report electronically filed with the SEC.

A) True
B) False

Correct Answer

verifed

verified

Which of the following is not one of the four main external users of financial statements?


A) Creditors
B) Investors
C) Government
D) Managers

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

Correct Answer

verifed

verified

What would happen to the net profit margin ratio if the company recorded a deferral adjusting entry at the end of 2012 for depreciation of $500 on one of its assets?


A) The net profit margin ratio would increase indicating an improvement in
B) performance.
C) The net profit margin ratio would decrease indicating less control over expenses.
D) The net profit margin ratio would not change.
E) The net profit margin ratio would have decreased in 2012 without this transaction.

F) B) and E)
G) A) and B)

Correct Answer

verifed

verified

The following single-step income statement was prepared:

Correct Answer

verifed

verified

blured image Prepare a multi-step income s...

View Answer

Form 8-K, which is filed with the SEC, is also known as a(n) :


A) quarterly report.
B) annual report.
C) current events report.
D) audit report.

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

Correct Answer

verifed

verified

The Sarbanes-Oxley Act requires external auditors to report on the company's internal controls over financial reporting.

A) True
B) False

Correct Answer

verifed

verified

Which of the following statements regarding analysis of ratios is true?


A) A time-series analysis compares a company's financial results for one period to its own results in other periods.
B) If we compare a company's performance in the current period to its competitors' performance, we are conducting a time-series analysis.
C) Benchmarks are judges' seats.
D) Cross-sectional analysis refers to a ratio comparison across companies that are in different industries.

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

Correct Answer

verifed

verified

The asset turnover ratio measures:


A) the profit generated by efficient management of assets.
B) the level of financing risk assumed by the company.
C) the sales revenue generated by efficient management of assets.
D) the ability to earn profit for the stockholders.

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

Correct Answer

verifed

verified

Numerous accounting scandals and misrepresentation of financial results have been reported in the news during the past few years. As a result the SEC recently has:


A) taken over responsibility for setting accounting rules in the United States.
B) required companies to issue monthly reports on financial data.
C) required companies to have two different accounting firms audit the financial statements included in the annual report on Form 10-K.
D) introduced severe fraud charges for managers found guilty of such actions.

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

Correct Answer

verifed

verified

Showing 101 - 120 of 140

Related Exams

Exam 1

Business Decisions and Financial Accounting

135 Questions

Exam 2

Reporting Investing and Financing Results on the Balance Sheet

126 Questions

Exam 3

Reporting Operating Results on the Income Statement

137 Questions

Exam 4

Adjustments, Financial Statements, and Financial Results

138 Questions

Exam 6

Internal Control and Financial Reporting for Cash and Merchandise Sales

131 Questions

Exam 7

Reporting and Interpreting Inventories and Cost of Goods Sold

138 Questions

Exam 8

Reporting and Interpreting Receivables, Bad Debt Expense, and Interest Revenue

140 Questions

Exam 9

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

141 Questions

Exam 10

Reporting and Interpreting Liabilities

133 Questions

Exam 11

Reporting and Interpreting Stockholders Equity

142 Questions

Exam 12

Reporting and Interpreting the Statement of Cash Flows

143 Questions

Exam 13

Measuring and Evaluating Financial Performance

143 Questions

Show Answer