3.
The ratio that is calculated by dividing cash dividends declared on common shares by net
earnings is called the:
A. dividend yield ratio.
B. earnings per share ratio.
C. common dividend ratio.
D. payout ratio.
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Blooms:
(1) A, (2) B, (3) C, (4) D, (5) B, (6) A, (7) D, (8) C, (9) A, (10) B, (11) C, (12) B, (13) A, (14) A,
(15) E, (16) A, (17) A, (18) C, (19) B, (20) C
Blooms: Analyze
Difficulty: Medium
Learning Objective: 1304 Compute and interpret profitability ratios.
Difficulty: Medium
Learning Objective: 1306 Compute and interpret solvency ratios.
Libby  Chapter 13 #34
35.
A quality of earnings ratio higher than one is an indicator of which of the following?
A. A company's high debt position.
B. That fixed assets a
78.
The quality of earnings computation is a test of the solvency of the company.
FALSE
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Blooms: Understand
Difficulty: Easy
Learning Objective: 1306 Compute and interpret solvency ratios.
Libby  Chapter 13 #78
79.
The
57. Calculate P Co's book value per share in 2012 and 2011 respectively.
A. 4.14 and cannot compute 2012's book value
B. 4.14 and 4.49
C. 4.21 and 4.42
D. 4.21 and cannot compute 2012's book value
58. All of the following ratios are investor measures of p
Blooms: Apply
Difficulty: Easy
Learning Objective: 1204 Discuss dividends; and analyze related transactions.
Libby  Chapter 12 #130
131.
At the end of 20C, Bush Corporation reported a $40,000 balance in its common share account
(stated value $5 per shar
5. Net sales are $2,700,000, beginning total assets are $750,000, and the asset turnover is 3.0.
What is the ending total asset balance?
A. $900,000.
B. $1,050,000.
C. $600,000.
D. $1,125,000.
6. Which of the following ratios usually is not considered to
Blooms: Apply
Difficulty: Medium
Learning Objective: 1203 Describe the characteristics of common shares; and analyze transactions affecting common shares.
Learning Objective: 1204 Discuss dividends; and analyze related transactions.
Learning Objective:
111.
The following data were available for Lorie Company:
Sales revenue, $225,000 (including 75,000 cash sales)
Cost of goods sold, $175,000
Average inventory (per month), $20,000
Average monthly balance in trade receivables, $20,000
Assume a business yea
26.
Box Company reported the following data at the end of 20B:
What was the average number of days to collect receivables during 20B?
A. 14.3
B. 16.2
C. 21.9
D. 36.5
Calculation: 365 ($225,000 $10,000) = 16.2
Blooms: Apply
Difficulty: Medium
Learning Obje
12.
Financial leverage will always be which of the following?
A. Positive.
B. Negative.
C. Either positive or negative.
D. Positive, negative, or zero.
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Blooms: Understand
Difficulty: Easy
Learning Objective: 1304 Comput
65.
In 2012, C Co's total liabilities were $10,742 million and shareholders' equity was $8,403
million. In 2012, P Co's total liabilities were $16,259 million and their shareholders' equity was
$6,401 million. Which of the following statements is false?
A
31. If a company has a current ratio of 1.3:1, what respective effects will the borrowing of cash by
shortterm debt and collection of trade receivables have on the ratio?
A.
B.
C.
D.
32. If trade receivables are collected quickly, it may indicate which o
Midterm #1 for Bus 215 Manaperial Accounting  McDowell

Guide Only All Chapters Content subject to Exam
Chapters 1,2,3,5
This is only a guide to help in preparing for the exam. It is not meant as a complete summary of questions on
the exam. The student
Final for Bus 215 Manaperial Accountine  McDowell
Guide Only  All Chapters Content subject to Exam
This is only a puide to help in preparing for the exam. It is not meant as a complete summary of questions on
the exam. The student is expected to know an
1. Know how to identify population, parameters, and the statistics that estimate the
parameters
*Always say all when writing the population (who are we studying?)
a. Parameters (what about that population we specifically want to learn about):
i. One sampl
42. Calculate C Co's current ratio for 2012 and 2011 respectively.
A. .54 and .59
B. .60 and .70
C. .66 and .74
D. .63 and .72
43. Calculate C Co's quick ratio for 2012 and 2011 respectively.
A. .30 and .32
B. .37 and .40
C. .55 and .64
D. .56 and .54
44.
72. Liquidity ratios measure the ability of the company to survive over a long period of time.
True
False
73. To compute component percentages for the statement of earnings, the base amount is profit.
True
False
74. In simple terms, a business strategy es
19. Nunn Company reported the following data:
What was the current ratio?
A. 0.5 to 1
B. 0.75 to 1
C. 1.5 to 1
D. 2.5 to 1
20. The inventory turnover ratio is calculated by dividing
A. cost of goods sold by the ending inventory.
B. cost of goods sold by t
119.Night Corporation gathered the following data at the end of the accounting period, December 31,
20D:
120.The following data were reported by Jupiter Company at yearend:
Compute the following ratios for the Company
(a) Debt to equity ratio:
(b) Curren
48.
Calculate C Co's gross profit ratio for 2012 and 2011 respectively.
A. 30.3% and 29.6%
B. 69.7% and 70.4%
C. 20.1% and 26.4%
D. 40.6% and 45.7%
Calculation: $13,796 $19,805 = 69.7%; $13,251 $18,813 = 70.4%
Blooms: Apply
Difficulty: Medium
Learning Obj
The following information was taken from the financial statements of C Co for the years 2012
and 2011:
Libby  Chapter 13
42.
Calculate C Co's current ratio for 2012 and 2011 respectively.
A. .54 and .59
B. .60 and .70
C. .66 and .74
D. .63 and .72
Calcul
_ 6. Current ratio
_ 7. Quick ratio
_ 8. Receivables turnover ratio
_ 9. Inventory turnover ratio
_ 10. Debt/equity ratio
_ 11. Owners' equity to total equities
_ 12. Creditors' equity to total equities
_ 13. Price/earnings ratio
_ 14. Dividend yield rati
126.
The charter of Delta Corporation specified a maximum of 25,000 common shares. At the
current date, 5,000 shares remain unissued, and 2,000 of the issued shares have been
reacquired and are still held by Delta. Give the number of shares:
Blooms: Apply
101.Dividend yield measures earnings generated by each share, based on the market price per
share.
True
False
102.Indicate the proper category for each ratio.
Primary Category
Test of:
A. Profitability
B. Liquidity
C. Solvency
D. Market
E. Miscellaneous r
19.
Nunn Company reported the following data:
What was the current ratio?
A. 0.5 to 1
B. 0.75 to 1
C. 1.5 to 1
D. 2.5 to 1
Calculation: $150,000 ($300,000  $200,000) = 1.5 to 1
Blooms: Apply
Difficulty: Medium
Learning Objective: 1305 Compute and interp
56.
Calculate P Co's dividend payout for 2012 and 2011 respectively.
A. 38.6% and 34.5%
B. 39.3% and 33.8%
C. 1.3% and 1.3%
D. 3.5% and 3.6%
Calculation: $.515 $1.31 = 39.3%; $.46 $1.36 = 33.8%
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Blooms: Apply
Difficulty:
124.Ricon Company had the following data available from the statements of financial position and
income statements:
125.Indicate the effect of each item on the ratios given below in the following manner: if an item would
cause an increase in the ratio, pl
121.
The following return on investment ratios were computed for ET Company:
(a) Financial leverage percent for each year was:
(b) Explain briefly the stockholders' advantage or disadvantage each year:
20A:
20B:
20C:
20D:
(a) 20A: 15%  12% = +3% positive
135.
Contrast the economic effects of a cash dividend (declared and paid) with a share dividend
(declared and issued) on the distributing corporation by completing the following chart by
placing "X" where appropriate.
Blooms: Apply
Difficulty: Medium
Lear
94.
Solvency ratios are evaluated by comparing them over time for a single company or by
comparing them with ratios for similar companies.
TRUE
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Blooms: Understand
Difficulty: Medium
Learning Objective: 1306 Compute and
109.Easy Company reported the following data at yearend:
110.The following data were shown in the records of Morgan Company at the end of 20B:
Compute the following ratios
(a) Quick ratio:
(b) Current (working capital) ratio:
(c) Receivable turnover:
(d)