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Devry ACCT 212 Week 7 Quiz

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Devry ACCT 212 Week 7 Quiz

Question 1. (TCO 1) Period to period percentage change in comparative financial statements is often called

  • benchmarking.
  • horizontal analysis.
  • vertical analysis.
  • common-size statements.

Question 2. (TCO 1) Horizontal analysis is performed on

  • 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. (TCO 1) Which of the following is typically used as the base in a vertical analysis of an income statement?

  • Cash
  • Inventory
  • Net income
  • Net sales

Question 4. (TCO 1) A financial statement item expressed as a percentage of a base amount is a result of

  • horizontal analysis.
  • ratio analysis.
  • vertical analysis.
  • comparative analysis.

Question 5. (TCO 1) Which of the following would be most helpful in the comparison of different size companies?

  • Horizontal analysis
  • Comparison of their net incomes
  • Comparison of their working capital balances
  • Preparation of common-size financial statements

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Question 6. (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

  • benchmarking.
  • gross margin analysis.
  • detail analysis.
  • intercompany analysis.

Question 7. (TCO 1) When analyzing the statement of cash flows, which of the following statement are true?

  • 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. (TCO 1) On a statement of cash flows, which is considered an operating activity?

  • Sale of securities
  • Purchase of fixed assets
  • Purchase of securities
  • Depreciation

Question 9. (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

  • days’ sales in receivables
  • current ratio.
  • accounts receivable turnover.
  • acid-test ratio.

Question 10. (TCO 1) Economic value added (EVA) is computed as:

  • 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.