ACCT 201 Test 2 Practice Test

ACCT 201 Test 2 Practice Test - 1) 2) 3) Which of the...

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Which of the following is not a key quality of useful information? a) relevant b) reliable c) consistent d) productive 2) Which of the following statements is true about the computation of asset turnover? a) Divide annual sales by average assets. b) Divide average sales by year-end assets. c) Divide average debt by average assets. d) Divide year-end debt by average assets. 3) Which of the following forms contains the SEC’s version of the annual report? a) 10-Q b) 10-K c) 8-K d) 8-Q 4) Which of the following would most directly violate the principle of consistency ? a) Two companies account for a similar transaction differently. b) A company accounts for the same transaction differently in different periods. c) Financial statements were prepared fraudulently d) Information is not useful to investors. 5) Which of the following would most directly violate the principle of comparability ? a) Two companies account for a similar transaction differently. b) A company accounts for the same transaction differently in different periods. c) Financial statements were prepared fraudulently d) Information is not useful to investors 6) What is a likely sequence of the following parts of a business? 1. Generate revenues 2. Invest in assets 3. Produce net income 4. Obtain financing a) 4, 2, 3, 1 b) 4, 1, 2, 3 c) 4, 3, 2, 1 d) 4, 2, 1, 3 7) What benchmarks are commonly used when comparing financial statement levels and ratios? a) Prior periods b) Joint ventures c) Competitors d) “a” and “c” e) “a,” “b,” and “c” 8) Which of the following statements is not true? a) The net profit ratio measures that amount of net income generated from each dollar of assets. b) The debt-to-assets ratio represents the proportion of total assets financed by debt. c)
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ACCT 201 Test 2 Practice Test - 1) 2) 3) Which of the...

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