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Chapter 14 - Financial Statement Analysis
Copyright Cengage Learning. Powered by Cognero.
Page 1
1. Comparative financial statements are designed to compare the financial statements of two or more corporations.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-02 - LO: 14-02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
DATE MODIFIED:
10/16/2017 6:37 PM
2. In horizontal analysis, the current year is the base year.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-02 - LO: 14-02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
DATE MODIFIED:
10/16/2017 6:37 PM
3. On a common-sized income statement, all items are stated as a percent of total assets or equities at year-end.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-02 - LO: 14-02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
Chapter 14 - Financial Statement Analysis
Copyright Cengage Learning. Powered by Cognero.
Page 6
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-03 - LO: 14-03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
DATE MODIFIED:
10/16/2017 6:37 PM
16. Using measures to assess a business's ability to pay its current liabilities is called current position analysis.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-03 - LO: 14-03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
DATE MODIFIED:
10/16/2017 6:37 PM
17. Current position analysis is used by short-term creditors to assess how quickly they will be repaid.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-03 - LO: 14-03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
Chapter 14 - Financial Statement Analysis
Copyright Cengage Learning. Powered by Cognero.
Page 9
ANSWER:
False
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-03 - LO: 14-03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
DATE MODIFIED:
10/16/2017 6:37 PM
24. Solvency analysis focuses on the ability of a business to pay its current and noncurrent liabilities.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-01 - LO: 14-01
FNMN.WAJO.19.14-04 - LO: 14-04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
DATE MODIFIED:
10/16/2017 6:37 PM
25. If the accounts receivable turnover for the current year has decreased when compared with the ratio for the preceding
year, there has been an acceleration in the collection of receivables.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-03 - LO: 14-03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
DATE MODIFIED:
10/16/2017 6:37 PM
Copyright Cengage Learning. Powered by Cognero.
Page 10
26. An increase in the accounts receivable turnover may be due to a change in how credit is granted and/or in collection
practices.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-03 - LO: 14-03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
DATE MODIFIED:
10/16/2017 6:37 PM
27. The number of days' sales in receivables is one means of expressing the relationship between average daily sales and
accounts receivable.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-03 - LO: 14-03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:35 PM
DATE MODIFIED:
10/16/2017 6:37 PM
28. A firm selling food should have higher inventory turnover rate than a firm selling office furniture.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom's: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.14-03 - LO: 14-03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.23 - Financial Statement Analysis
