Question : 11.The accounts receivable turnover and inventory turnover ratios used to : 1242777

11.The accounts receivable turnover and inventory turnover ratios are used to analyze

a.Long-term solvency

b.Profitability

c.Liquidity

d.Leverage

12.A high accounts receivable turnover ratio indicates

a.Customers are making payments quickly

b.A large portion of the company’s sales are on credit

c.Many customers are not paying their receivables in a timely manner

d.The company’s sales have increased

13. The return on assets ratio is comprised of

a.Profit margin and debt to total assets ratio.

b.Profit margin and asset turnover ratio.

c.Times interest earned and debt to stockholders’ equity ratio.

d.Profit margin and free cash flow.

14.An example of the correction of an error in previously issued financial statements is a change

a.From the completed contract to the percentage-of-completion method of accounting for long-term construction-type contracts.

b.In the depletion rate, based on new engineering studies of recoverable mineral resources.

c.From the sum-of-years-digits to the straight-line method of depreciation for all plant assets.

d.From the installment basis of recording sales to the accrual basis, when collection of the sales price has been and continues to be reasonably assured

15.Which of the following is characteristic of a change in an accounting estimate?

a.It usually need not be disclosed

b.It does not affect the financial statements of prior periods

c.It should be reported through the restatement of the financial statements

d.It makes necessary the reporting of pro forma amounts for prior periods

16.Which of the following items, if material in amount would normally be considered an extraordinary item for reporting results of operations?

a.Utilization of a net operating loss carryforward

b.Gains or losses on disposal of a segment of a business

c.Adjustments of accruals on long-term contracts

d.Gains or losses from a fire

17.Which of the following is an example of an extraordinary item in reporting results of operations?

a.A loss incurred because of a strike by employees

b.The write-off of deferred research and development costs believed to have no future benefit

c.A gain resulting from the devaluation of the U.S. dollar

d.A gain resulting from the state exercising its right of eminent domain on a piece of land used as a parking lot

18.A company changed its method of inventory pricing from last-in, first-out to first-in, first-out during the current year. Generally accepting accounting principles require that this change in accounting method be reported by:

a.Accounting for the effects of the change in the current and future periods.

b.Showing the cumulative effect of the change in the current year’s financial statements and pro forma effects on prior year’s financial statements in an appropriate footnote

c.Disclosing the reason for the change in the “significant accounting policies” footnote for the current year but not restating prior year financial statements

d.Applying retroactively the new method in restatements of prior years and appropriate footnote disclosures

19.A transaction that is material in amount, unusual in nature, but not infrequent in occurrence should be presented separately as a (an)

a.Component of income from continuing operations, but not net of applicable income taxes

b.Component of income from continuing operations, net of applicable income taxes

c.Extraordinary item, net of applicable income taxes

d.Prior period adjustment, but not net of applicable income taxes

20.An extraordinary item should be reported separately as a component of income

a.After discontinued operations of a component of a business

b.Before discontinued operations of a  component of a business

c.After cumulative effect of accounting changes and after discontinued operations of a component of a business

d.After cumulative effect of accounting changes and before discontinued operations of a component of a business