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CHAPTER 10 NAME ___________________________________
TEN-MINUTE QUIZ SECTION _____________ DATE____________
_____________________________________________________________________________
_
_____ 1. Items separated from the regular earnings of a company include:
a. Discontinued operations
b. Extraordinary items
c. Loss on sale of equipment
d. Two of the above
_____ 2. To be reported as an extraordinary item, the event must be:
a. Unusual and infrequent
b. Unusual and frequent
c. Normal and infrequent
d. Part of continuing operations
_____ 3. When using horizontal analysis, the base year is normally:
a. The current year
b. The earliest year presented
c. The latest year presented
d. The year with the highest revenues
_____ 4. Jacksonville Company reported cost of goods sold of $80,000 in 20X5 and
$92,000 in 20X6. The percentage change is:
a. 12%
b. 13%
c. 15%
d. None of the above
_____ 5. A method of financial statement analysis that must use two or more years of
financial statements is known as:
a. Horizontal
b. Diagonal
c. Ratio
d. All of the above
_____ 6. What type of ratios measure the company’s ability to pay its current bills and
operating costs?
a. Liquidity
b. Solvency
c. Profitability
d. Market indicator
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 10-1
_____ 7. Liquidity ratios include all of the following, except:
a. Return on assets
b. Current ratio
c. Working capital
d. Acid test
_____ 8. Which of the following types of ratios measure the ability of a company to
survive over a long period of time?
a. Liquidity ratios
b. Solvency ratios
c. Profitability ratios
d. Market indicators
_____ 9. An extremely high price-earnings ratio may indicate:
a. That the stock is underpriced
b. That the stock is overpriced
c. That the investment is low risk
d. That the company pays high dividends
_____ 10. Dividend-yield ratio is calculated by:
a. Dividing dividend per share by market price per share
b. Dividing market price per share by dividend per share
c. Subtracting the dividend per share from the earnings per share
d. Dividing the dividend per share by the earnings per share
ANSWER KEY - CHAPTER 10 – TEN-MINUTE QUIZ
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 10-2
