51. Which of the following below generally is the most useful in analyzing companies of different sizes? A. Comparative statementsB. Common-size financial statementsC. Price-level accountingD. Audit report
52. The percent of fixed assets to total assets is an example of: A. vertical analysis.B. solvency analysis.C. profitability analysis.D. horizontal analysis.
53. What type of analysis is indicated by the following?
Increase (Decrease)
2012
2011
Amount
Percent
Current assets
$ 450,000
$ 500,000
($ 50,000)
-10%
Fixed assets
1,800,000
1,500,000
300,000
20%
A. Vertical analysisB. Horizontal analysisC. Liquidity analysisD. Common-size analysis
54. In a common-size financial statement, which of the following is given a percentage of 100 percent? A. Total liabilitiesB. Net incomeC. Costs of goods soldD. Total assets
55. In performing a vertical analysis, the base for cost of goods sold is: A. total selling expenses.B. net sales.C. total expenses.D. total revenues.
56. The independent auditor’s report does which of the following? A. Describes which financial statements are covered by the auditB. Gives the auditor’s opinion regarding the fairness of the financial statementsC. Summarizes what the auditor didD. States that the financial statements are truthful
57. Bloom’s Garden Center CompanySelected data from the financial statements of Bloom’s Garden Center are provided below.
2012
2011
Accounts receivable
$ 70,000
$ 56,000
Inventory
15,000
20,000
Total assets
450,000
380,000
Net sales
400,000
300,000
Cost of goods sold
200,000
180,000
Refer to the selected data provided for Bloom’s Garden Center. Which of the following would result from a horizontal analysis of Bloom’s balance sheet? A. Accounts receivable increased $14,000 or 25% during 2012.B. Accounts receivable is around five times larger than inventory in 2012.C. Accounts receivable is 15.6% of total assets in 2012.D. The accounts receivable turnover ratio is 6.35 times in 2012.
58. Refer to the selected data provided for Bloom’s Garden Center. Which of the following would result from a horizontal analysis of Bloom’s income statement? A. Net sales increased $100,000 during 2012, or 33.33% of the 2011 amount.B. Gross profit is 50% of net sales for 2012.C. Accounts receivable is 15.6% of total assets in 2012.D. The accounts receivable turnover ratio is 6.35 times in 2012.
59. Refer to the selected data provided for Bloom’s Garden Center. Which of the following would result from a horizontal analysis of Bloom’s income statement? A. Cost of goods sold is 50% of net sales for 2012.B. Gross profit is 50% of net sales for 2012.C. Cost of goods sold increased $20,000 or 11.1% during 2012.D. Inventory decreased $5,000 or 25% during 2011.
60. Refer to the selected data provided for Bloom’s Garden Center. Which of the following would result from a vertical analysis of Bloom’s income statement? A. The accounts receivable turnover ratio is 6.35 in 2012.B. Gross profit is 50% of net sales for 2012.C. Cost of goods sold increased $20,000 or 11.11% during 2012.D. Net sales is 88.9% of total assets for 2012.
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