# ACC/561 ACC 561 WEEK 2 WILEYPLUS PRACTICE QUIZ (SCORE 13/13) - 75769

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Question 1 The relationship between current assets and current liabilities is important in evaluating a company’s market value. solvency. profitability. liquidity. Question 2 Which of the following is a measure of liquidity? Debt to equity ratio Earnings per share Working capital Profit margin Question 3 Current assets divided by current liabilities is known as the profit margin. capital structure. working capital current ratio. Question 4 Danner Corporation reported net sales of \$600,000, \$680,000, and \$800,000 in the years 2011, 2012, and 2013, respectively. If 2011 is the base year, what percentage do 2013 sales represent of the base? 113% 33% 133% 75% Question 5 In analyzing financial statements, horizontal analysis is a requirement. principle. theory. tool. Question 6 Comparative balance sheets are usually prepared for at least one year. do not show a comparison of total stockholders’ equity. do not show both dollar amount and percentage changes. are usually prepared for at least two years. Question 7 Assume the following cost of goods sold data for a company: 2013 \$1,500,000 2012 1,200,000 2011 1,000,000 If 2011 is the base year, what is the percentage increase in cost of goods sold from 2011 to 2013? 50% 150% 67% 20% Question 8 Comparisons of data within a company are an example of the following comparative basis: Interregional. Industry averages. Intracompany. Intercompany. Question 9 The following schedule is a display of what type of analysis? Amount Percent Current assets \$100,000 25% Property, plant, and equipment 300,000 75% Total assets \$400,000 100% Horizontal analysis Differential analysis Vertical analysis Ratio analysis Question 10 A common measure of profitability is the return on common stockholders’ equity ratio. current ratio. current cash debt coverage ratio. debt to total assets. Question 11 Which one of the following would be considered a long-term solvency ratio? Return on total assets Debt to total assets ratio Current cash debt coverage ratio Receivables turnover Question 12 The current ratio is calculated by subtracting current liabilities from current assets. used to evaluate a company’s liquidity and short-term debt paying ability. calculated by dividing current liabilities by current assets. used to evaluate a company’s solvency and long-term debt paying ability. Question 13 Richards, Inc. has the following income statement (in millions): RICHARDS, INC. Income Statement For the Year Ended December 31, 2012 Net Sales \$180 Cost of Goods Sold 60 Gross Profit 120 Operating Expenses 75 Net Income \$ 45 Using vertical analysis, what percentage is assigned to net income? 100% 75% 25% None of the above.
Solution Description

Question 1

The relationship between current assets and current liabilities is important in evaluating a company’s

market value.

solvency.

profitability.

liquidity.

Question 2

Which of the following is a measure of liquidity?

Debt to equity ratio

Earnings per share

Working capital

Profit margin

Question 3

Current assets divided by current liabilities is known as the

profit margin.

capital structure.

working capital

current ratio.

Question 4

Danner Corporation reported net sales of \$600,000, \$680,000, and \$800,000 in the year

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