ACCT 212 Week 7 Quiz (Updated)

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ACCT 212 Week 7 Quiz (Updated)



Question 1.Question :(TCO 1) Period to period percentage change in comparative financial statements is often called
Student Answer: benchmarking.
 horizontal analysis.
 vertical analysis.
 common-size statements.


Question 2.Question :(TCO 1) Horizontal analysis is performed on
Student Answer: only the income statement.
 only the balance sheet.
 only the statement of retained earnings
 the income statement, the balance sheet, and the statement of retained earnings.


Question 3.Question :(TCO 1) Which of the following is typically used as the base in a vertical analysis of an income statement?
Student Answer: Cash
 Net income
 Net sales

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Question 4.Question :(TCO 1) A financial statement item expressed as a percentage of a base amount is a result of
Student Answer: horizontal analysis.
 ratio analysis.
 vertical analysis.
 comparative analysis.


Question 5.Question :(TCO 1) Which of the following would be most helpful in the comparison of different size companies?
Student Answer: Horizontal analysis
 Comparison of their net incomes
 Comparison of their working capital balances
 Preparation of common-size financial statements


Question 6.Question :(TCO 1) Walton Company’s return on sales for the most recent year was 5%. The industry leader reports a return on sales of 7%. The comparison of each company’s return on sales is an example of
Student Answer: benchmarking.
 gross margin analysis.
 detail analysis.
 intercompany analysis.


Question 7.Question :(TCO 1) When analyzing the statement of cash flows, which of the following statement are true?
Student Answer: Cash has no effect on the success of the company.
 Cash is ignored when analyzing a company.
 An excess of cash is the sign of a healthy company.
 A company with a large cash balance is ensured success.


Question 8.Question :(TCO 1) On a statement of cash flows, which is considered an operating activity?
Student Answer: Sale of securities
 Purchase of fixed assets
 Purchase of securities


Question 9.Question :(TCO 1) The ratio that provides an estimate of the number of days, on average, that it takes for customers to pay their account is the
Student Answer: days’ sales in receivables
 current ratio.
 accounts receivable turnover.
 acid-test ratio.


Question 10.Question :(TCO 1) Economic value added (EVA) is computed as:
Student Answer: net income + long-term debt + interest expense.
 net income + interest expense – capital charge.
 net income – interest expense + capital charge.
 net income – long-term debt + interest expense.



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