test7_ch14-15 - Achievement Test 7 Chapters 14-15 Financial...

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Achievement Test 7 Chapters 14-15 Name ___________________________ Financial Accounting, Fifth Edition Instructor ________________________ Section # _________ Date __________ Part I II III IV V Total Points 32 12 20 24 12 100 Score PART I — MULTIPLE CHOICE (32 points) Instructions Designate the best answer for each of the following questions. ____ 1. The inventory turnover ratio is computed by dividing the average inventories into a. net sales. b. total assets. c. cost of goods sold. d. stockholders’ equity. ____ 2. In performing a vertical analysis, the base for prepaid expenses is a. total current assets. b. total assets. c. total liabilities. d. total expenses. ____ 3. Which one of the following transactions does not affect cash? a. Acquisition and retirement of bonds payable. b. Write-off of an uncollectible accounts receivable. c. Acquisition of treasury stock. d. Payment of a cash dividend. _____ 4. The purchase of office equipment for cash a. is a cash outflow from financing activities. b. is a cash outflow from operating activities. c. is a cash outflow from investing activities. d. does not affect cash flows. _____ 5. Which of the following is a financing activity? a. purchase of treasury stock. b. purchase of trading securities. c. purchase of inventory. d. purchase of equipment.
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Test Bank for Financial Accounting, Fifth Edition ____ 6. If a loss of $13,000 is incurred in selling (for cash) equipment having a book value of $45,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is a. $32,000. b. $45,000. c. $13,000. d. $58,000. _____ 7. Roses Paint reported sales of $350,000, total assets of $150,000, total stockholders' equity of $60,000, current assets of $50,000, current liabilities of $30,000, and cash of $15,000. In a vertical analysis of the balance sheet, cash would be shown as a. 25%. b. 10%. c. 30%. d. 20%. ____ 8. Common size analysis is an alternative term for a. ratio analysis. b. horizontal analysis. c. liquidity analysis. d. vertical analysis. ____ 9. The purchase of an office building by issuing long-term notes payable should be reported as a a. cash outflow in the financing section of the statement of cash flows. b. cash outflow in the investing section of the statement of cash flows. c. cash outflow in the operating section of the statement of cash flows. d. noncash investing and financing activity. ____ 10. As an indicator of financial health, a low ratio is desirable for the a. asset turnover ratio. b. return on assets ratio. c. debt to total assets ratio. d. current ratio. ____ 11. Swanson Company had inventory of $220,000 and $180,000 on December 31, 2004, and December 31, 2005, respectively. Cost of goods sold for 2005 was $1,560,000.
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test7_ch14-15 - Achievement Test 7 Chapters 14-15 Financial...

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