Question : Multiple Choice Questions 36.A comparative financial statement: A. Places the balance sheet, the : 1259536

 

Multiple Choice Questions 

36.A comparative financial statement:   

A. Places the balance sheet, the income statement, and the statement of cash flows side-by-side in order to compare the results.

 

B. Places two or more years of a financial statement side-by-side in order to compare results.

 

C. Places the financial statements of two or more companies side-by-side in order to compare results.

 

D. Places the dollar amounts next to the percentage amounts of a given year for the income statement.

 

 

 

 

37.The changes in financial statement items from a base year to following years are called:   

A. Money changes.

 

B. Trend percentages.

 

C. Component percentages.

 

D. Ratios.

 

 

 

 

38.The measurement of the relative size of each item included in a total is called:   

A. Money changes.

 

B. Trend percentages.

 

C. Component percentages.

 

D. Ratios.

 

 

 

 

39.One number expressed as a percentage of another is called:   

A. Money changes.

 

B. Trend percentages.

 

C. Component percentages.

 

D. Ratios.

 

 

 

 

40.Comparative financial statements compare the company’s current statements with:   

A. Those of prior periods.

 

B. Those of other companies in the same industry.

 

C. Those of the company’s principal competitor.

 

D. The budgeted level of performance for the period.

 

 

 

 

41.On common size income statements, each component in the income statement is represented as a percentage of:   

A. Net income.

 

B. Net sales.

 

C. Total assets.

 

D. Profit.

 

 

 

 

42.During the years 2013 through 2015, Powers, Inc., reported the following amounts of net income (dollars in thousands):  Relative to the prior year, the percentage change in net income:   

A. Was the same in 2014 and 2015.

 

B. Was larger in 2015 than in 2014.

 

C. Was smaller in 2015 than in 2014.

 

D. Cannot be determined without knowing how many shares of stock were outstanding.

 

 

 

43.A high quality of earnings is indicated by:   

A. Earnings derived largely from newly introduced products.

 

B. Declaration of both cash and stock dividends.

 

C. Use of the FIFO method of inventory during sustained inflation.

 

D. A history of increasing earnings and conservative accounting methods.

 

 

 

 

44.In evaluating the quality of a company’s earnings, which of the following factors is least important?   

A. The accounting methods used by management.

 

B. The trend of the company’s earnings over a period of years.

 

C. The dollar amount of earnings per share.

 

D. The stability and sources of the company’s earnings.

 

 

 

 

45.The term, classified financial statements, refers:   

A. To the financial statements of all companies working on government projects.

 

B. Only to the financial statements of defense contractors working on secret projects.

 

C. To financial statements prepared for use by management, but not for distribution outside of the organization.

 

D. To financial statements in which items with certain characteristics are placed together in a group in an effort to develop useful subtotals.

 

 

 

 

 

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