comp_exam_d - COMPREHENSIVE EXAMINATION D(Chapters 12 13...

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COMPREHENSIVE EXAMINATION D (Chapters 12 - 13) Approximate Problem Topic Points Minutes D - I Multiple Choice . ........................................... 24 24 D - II Comparative analysis. .................................. 10 10 D - III Statement of Cash Flows . ........................... 30 30 D - I Calculation of Ratios . .................................. 36 20 100 84 Checking Work . .......................................... 6 90
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Test Bank for Financial Accounting: Tools for Business Decision Making, Fourth Edition D - 2 Problem D - I — Multiple Choice (24 points) Circle the one best answer. 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. The best way to study the relationship of the components of financial statements is to prepare a. common size statements. b. a trend analysis. c. profitabiltiy analysis. d. ratio analysis. 3. In performing a vertical analysis, the base for prepaid expenses is a. total current assets. b. total assets. c. total liabilities. d. prepaid expenses in a previous year. 4. The Paine Company had credit sales of $600,000. The beginning accounts receivable balance was $60,000 and the ending accounts receivable balance was $80,000. Cash collections from customers were a. $680,000. b. $620,000. c. $600,000. d. $580,000. 5. Gator Company reported net income of $40,000 for the year ended December 31, 2007. During the year, inventories decreased by $6,000, accounts payable decreased by $9,000, depreciation expense was $10,000 and a loss on disposal of equipment of $4,500 was recorded. Net cash provided by operations in 2007 using the indirect method was a. $69,500. b. $42,500. c. $38,500. d. $51,500. OR 5. Mower Company reported cost of goods sold of $350,000 for the year ended December 31, 2007. During the year, inventories decreased $6,000 and accounts payable decreased $9,000. The cash payments to suppliers in 2007, using the direct method was a. $365,000. b. $347,000. c. $335,000. d. $353,000.
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Comprehensive Examination D D - 3 6. 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 cash dividend 7. Panzer Clothing Store had a balance in the Accounts Receivable account of $780,000 at the beginning of the year and a balance of $820,000 at the end of the year. Net credit sales during the year amounted to $5,840,000. The receivable turnover ratio was a. 7.1 times. b. 7.3 times. c. 7.5 times. d. 7 times. 8. Hepford Company reported the following on its income statement: Income before income taxes $420,000 Income tax expense 120,000 Net income $300,000 An analysis of the income statement revealed that interest expense was $80,000. Hepford Company's times interest earned was a. 8 times. b. 5.25 times.
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This note was uploaded on 12/05/2009 for the course ACCT 2102 taught by Professor Constable,d during the Fall '08 term at Georgia Perimeter.

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comp_exam_d - COMPREHENSIVE EXAMINATION D(Chapters 12 13...

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