loader  Loading... Please wait...

Question(s) / Instruction(s):

41.     A company that uses the last-in, first-out (LIFO) method of inventory pricing finds at an interim reporting date that there has been a partial liquidation of the base period inventory level. The decline is considered temporary and the partial liquidation is expected to be replaced prior to year end. The amount shown as inventory at the interim reporting date should
a.     be shown at the actual level, and cost of sales for the interim reporting period should include the expected cost of replacement of the liquidated LIFO base.
b.     be shown at the actual level, and cost of sales for the interim reporting period should reflect the historical cost of the liquidated LIFO base.
c.     not give effect to the LIFO liquidation, and cost of sales for the interim reporting period should reflect the historical cost of the liquidated LIFO base.
d.     be shown at the actual level, and the decrease in inventory level should not be reflected in the cost of sales for the interim reporting period.


     42.     Companies should disclose all of the following in interim reports except
a.     basic and diluted earnings per share.
b.     changes in accounting principles.
c.     post-balance-sheet events.
d.     seasonal revenue, cost, or expenses.

     43.     The required approach for handling extraordinary items in interim reports is to
a.     prorate them over all four quarters.
b.     prorate them over the current and remaining quarters.
c.     charge or credit the loss or gain in the quarter that it occurs.
d.     disclose them only in the notes.

     S44.     If the financial statements examined by an auditor lead the auditor to issue an opinion that contains an exception that is not of sufficient magnitude to invalidate the statement as a whole, the opinion is said to be
a.     unqualified.
b.     qualified.
c.     adverse.
d.     exceptional.

     P45.     The MD&A section of an enterprise's annual report is to cover the following three items:
a.     income statement, balance sheet, and statement of owners' equity.
b.     income statement, balance sheet, and statement of cash flows.
c.     liquidity, capital resources, and results of operations.
d.     changes in the stock price, mergers, and acquisitions.

     S46.     Which of the following best characterizes the difference between a financial forecast and a financial projection?
a.     Forecasts include a complete set of financial statements, while projections include only summary financial data.
b.     A forecast is normally for a full year or more and a projection presents data for less than a year.
c.     A forecast attempts to provide information on what is expected to happen, whereas a projection may provide information on what is not necessarily expected to happen.
d.     A forecast includes data which can be verified about future expectations, while the data in a projection is not susceptible to verification.

     47.     A financial forecast per professional pronouncements presents to the best of the responsible party's knowledge and belief,
a.     an entity's expected financial position, results of operations, and cash flows.
b.     an assessment of the company's ability to be successful in the future.
c.     given one or more hypothetical assumptions, an entity's expected financial position, results of operations, and cash flows.
d.     an assessment of the company's ability to be successful in the future under a number of different assumptions.

     *48.     Cash, short-term investments, and net receivables are the numerator for
     Acid-Test Ratio     Current Ratio
a.          Yes     No
b.          Yes     Yes
c.          No     No
d          No     Yes
     *49.     Theoretically, in computing the receivables turnover, the numerator should include
a.     net sales.
b.     net credit sales.
c.     sales.
d.     credit sales.

     *50.     The rate of return on common stock equity is calculated by dividing
a.     net income by average common stockholders’ equity.
b.     net income less preferred dividends by average common stockholders’ equity.
c.     net income by ending common stockholders’ equity.
d.     net income less preferred dividends by ending common stockholders’ equity.

     *51.     The payout ratio is calculated by dividing
a.     dividends per share by earnings per share.
b.     cash dividends by net income plus preferred dividends.
c.     cash dividends by market price per share.
d.     cash dividends by net income less preferred dividends.

     *52.     Which of the following ratios measures long-term solvency?
a.     Acid-test ratio
b.     Receivables turnover
c.     Debt to total assets
d.     Current ratio

     *53.     The calculation of the number of times interest is earned involves dividing
a.     net income by annual interest expense.
b.     net income plus income taxes by annual interest expense.
c.     net income plus income taxes and interest expense by annual interest expense.
d.     none of these.

     *54.     When should an average amount be used for the numerator or denominator?
a.     When the numerator is a balance sheet item or items
b.     When the denominator is a balance sheet item or items
c.     When a ratio consists of an income statement item and a balance sheet item
d.     When the numerator is an income statement item or items

     *55.     The basic limitations associated with ratio analysis include
a.     the lack of comparability among firms in a given industry.
b.     the use of estimated items in accounting.
c.     the use of historical costs in accounting.
d.     all of these.

Find Similar Answers by Subject


Student Reviews

Rate and review your solution! (Please rate on a Scale of 1 - 5. Top Rating is 5.)


Expert's Answer
Download Solution:
$3.80

This solution includes:

  • Plain text
  • Cited sources when necessary
  • Attached file(s)
  • Solution Document(s)



Reach Us

408-538-8534

20-3582-4059

39-008-4233

+1-408-904-6494