116.
Richard’s Sporting Goods reports net income of $100,000, net sales of $500,000, and
average assets of $1,000,000. The return on assets is:
117.
Richard’s Sporting Goods reports net income of $100,000, net sales of $500,000, and
average assets of $1,000,000. The profit margin is:
118.
Richard’s Sporting Goods reports net income of $100,000, net sales of $500,000, and
average assets of $1,000,000. The asset turnover is:
119.
The price-earnings (PE) ratio is calculated as:
120.
Curry Footwear reports net income of $500,000, earnings per share of $1.50, and has a
stock price of $45.00 at the end of the year. What is Curry Footwear’s price–earnings
ratio?
121.
Compared to growth stocks, value stocks’ price-earnings ratio is typically:
122.
All of the following are profitability ratios except:
123.
Investors view what as the number one measure of company success?
124.
Which of the following items would be reported at the very bottom of the income
statement just before net income?
125.
The sale or disposal of a significant component of a company’s operations is referred to
as:
126.
A discontinued operation refers to:
127.
What is the correct order to present the following items in the income statement?
128.
Popson Inc. incurred a material loss due to the write-down of inventory. This loss should
be reported as:
129.
Popson Inc. incurred a material gain on the sale of land. This gain should be reported as:
130.
Which of the following statements is
not
true?
131.
Examples of discontinued operations include all of the following
except
:
132.
Which of the following income statement items is least likely to persist into future
periods?
133.
LeBron’s Bookstores has two divisions: media and books. The media division had another
great year with net sales of $14 million, cost of goods sold of $8 million, operating
expenses of $3 million, and income tax expense of $900,000. The book division did not do
as well and was sold during the year. The loss from operations and sale of the book
division was $400,000 before taxes and $280,000 after taxes.
Assuming the sale of the book division is reported as a discontinued operation, at what
amount did LeBron’s Bookstores report the discontinued operations?
134.
LeBron’s Bookstores has two divisions: media and books. The media division had another
great year with net sales of $14 million, cost of goods sold of $8 million, operating
expenses of $3 million, and income tax expense of $900,000. The book division did not do
as well and was sold during the year. The loss from operations and sale of the book
division was $400,000 before taxes and $280,000 after taxes.
Assuming the sale of the book division is reported as a discontinued operation, at what
amount did LeBron’s Bookstores report net income?
135.
LeBron’s Bookstores has two divisions: media and books. The media division had another
great year with net sales of $14 million, cost of goods sold of $8 million, operating
expenses of $3 million, and income tax expense of $900,000. The book division did not do
as well and was sold during the year. The loss from operations and sale of the book
division was $400,000 before taxes and $280,000 after taxes.
Assuming the sale of the book division is reported as a discontinued operation, at what
amount did LeBron’s Bookstores report income before tax?
136.
Which of the following is a result of
conservative
accounting practices?
137.
Which of the following is a result of
aggressive
accounting practices?
138.
The financial statements of a firm that uses more conservative accounting practices would
be likely to report:
139.
The financial statements of a firm that uses more aggressive accounting practices would
be likely to report:
140.
Which of the following is NOT an example of applying conservatism in accounting?
141.
Which of the following is NOT an example of aggressive accounting practices?
142.
Which of the following is a conservative accounting practice?
143.
Which of the following is an aggressive accounting practice?
144.
Which of the following is a conservative accounting practice?
145.
Which of the following is an aggressive accounting practice?
146.
Which of the following is a conservative accounting practice?
12–76
147.
Which of the following is an aggressive accounting practice?
Matching Questions
148.
Match the following
Analyzes trends in financial statement data for a single
2. Profitability ratios
Have lower share prices in relationship to their fundamental
Expresses each item in a financial statement as a
4. Horizontal
Have high expectations of future earnings and therefore
Measure the earnings or operating effectiveness of a
149.
Match the following
2. Aggressive accounting
Accounting choices that result in reporting lower income,
3. Discontinued
4. Conservative
Accounting choices that result in reporting higher income,
A tool to analyze trends in financial statement data for a
The sale or disposal of a significant component of a
7. Other revenues and
A means to express each item in a financial statement as
150.
Match the following
Cost of goods sold divided by average inventory; the
number of times the firm sells its average inventory balance
2. Average days in
Total liabilities divided by total stockholders’ equity;
3. Times interest
Approximate number of days the average inventory is held.
Ratio that compares interest expense with income available
5. Receivables
Net sales divided by average accounts receivable; the
number of times during a year that the average accounts
6. Inventory turnover
Cash, short-term investments, and accounts receivable
divided by current liabilities; measures the availability of liquid
7. Average collection
Current assets divided by current liabilities; measures the
Approximate number of days the average accounts
151.
Match the following
Net income divided by average total assets; measures the
amount of net income generated for each dollar invested in
2. Return on assets
Compares a company’s share price with its earnings per share.
3. Gross profit ratio
Net income divided by average stockholders’ equity; measures
Gross profit divided by net sales; measures the amount by
which the sale price of inventory exceeds its cost per dollar of
5. Price-earnings
Net sales divided by average total assets; which measures the
Net income divided by net sales; indicates the earnings per