ACCT 5312 EXAM 1 2026/2027 WITH ACTUAL
CORRECT QUESTIONS AND VERIFIED
DETAILED ANSWERS |CURRENTLY TESTING
QUESTIONS AND SOLUTIONS|ALREADY
GRADED A+|NEWEST |BRAND NEW VERSION!!|
|JUST RELEASED
Which of the following are reported in the statement of changes in stockholders' equity?
- Net income for the year
- Total stockholders' equity at the end of the year
- Year-end balance of retained earnings
- Dividends for the year
- Common stock issued during the year
In the United States, the dollar is the _______ of ________ for all transactions.
unit; measurement
Which of the following statements is true regarding the statement of cash flows?
- Cash received from the sale of buildings or equipment is an investing activity, and the
activity is a source of cash.
- Depreciation expense is added back to net income in the operating activities section.
- The increase in accounts payable for the year is a source of cash and is shown as an
operating activity.
- Cash received from the sale of long-term debt is a financing activity, and the activity is a
source of cash.
The three concepts/principles that relate to transactions are:
unit of measurement, cost principle, and objectivity
Which of the following statements are true regarding the matching concept?
1|Page
,- Expenses are recorded in the period in which they are incurred.
- Revenues are recorded in the period in which they are earned.
Limiting a firm's ability to switch back and forth between alternative generally accepted
accounting methods is driven by which of the following concepts/principles?
Consistency
Which statement about trend analysis is correct?
It generally leads to a more meaningful analysis when conducted over several years than
does the observation of a single year's ratio result.
The annual rate of return on a six-month investment of $1,000 that earns a return of $100 is
______.
Rate of return= (Amt of Return/Amt Invested)/(Time in Yrs)
20%
How is the amount of interest earned on an investment calculated?
Interest= Principle($) x Rate(%) x Time(Yrs)
Which of the following would represent a correct calculation of interest earned on a six
month, $100 investment?
$100 principal x 10% rate x 6/12 = $5 interest
If margin = 5 percent, net income = $100,000, and turnover = 4.0, then ______.
ROI= (Net Income/Sales) x (Sales/Avg Total Assets)
>> ROI = 20%, average total assets = $500,000, and sales = $2,000,000
*Net Income/Sales=Margin
*Sales/Avg Total Assets=Turnover
Trend analysis of ratios ______.
2|Page
,is a meaningful comparison despite the use of different financial accounting alternatives to
develop the data used in the ratios
In the DuPont model for ROI, margin is calculated as net ___________ divided by
_________________.
income
sales
The annual rate of return on a two-year investment of $1,000 that earns a total return of
$100 is ______.
5%
ROR= ($100/$1000)/2
What do you need to know to calculate the amount of interest earned on an investment?
(Choose every correct answer.)
-The principle amt invested
-The length of time the funds are invested
-The interest rate per year
If turnover is 1.5 times per year and ROI is 9 percent, then margin is ________ percent.
6
If the rate of return on an investment was 10 percent _______.
and $500 was invested for one year, then the return on the investment would have been $50
If sales = $500,000, turnover = 1.5, and net income = $75,000, then _______.
ROI = 22.5% and margin = 15%
>>Margin = $75,000 / $500,000 = 15%
ROI = 15% x 1.5 = 22.5%<<
3|Page
, If stockholders' equity at the beginning of the year = $50,000, stockholders' equity at the
end of the year = $70,000, and ROE = 25 percent, then _______.
average stockholders' equity = $60,000 and net income = $15,000
>>Average stockholders' equity = ($50,000 + $70,000) / 2 = $60,000
Net income = $60,000 x
25% = $15,000<<
In the DuPont model for analyzing ROI, turnover is calculated as _______ divided by average
total _______.
sales
assets
If margin is 4 percent and ROI is 12 percent, then turnover is ______ times per year.
3
Turnover= ROI/Margin
If net income = $20,000 and average stockholders' equity = $80,000, then ROE = __________
percent.
25
ROE= Net Income/Avg Stockholders' equity
A firm's liquidity refers to
its ability to meet its current obligations as they become due
The DuPont model for ROI expresses _____.
turnover as sales / average total assets
Working capital refers to the excess of a firm's ______.
4|Page
CORRECT QUESTIONS AND VERIFIED
DETAILED ANSWERS |CURRENTLY TESTING
QUESTIONS AND SOLUTIONS|ALREADY
GRADED A+|NEWEST |BRAND NEW VERSION!!|
|JUST RELEASED
Which of the following are reported in the statement of changes in stockholders' equity?
- Net income for the year
- Total stockholders' equity at the end of the year
- Year-end balance of retained earnings
- Dividends for the year
- Common stock issued during the year
In the United States, the dollar is the _______ of ________ for all transactions.
unit; measurement
Which of the following statements is true regarding the statement of cash flows?
- Cash received from the sale of buildings or equipment is an investing activity, and the
activity is a source of cash.
- Depreciation expense is added back to net income in the operating activities section.
- The increase in accounts payable for the year is a source of cash and is shown as an
operating activity.
- Cash received from the sale of long-term debt is a financing activity, and the activity is a
source of cash.
The three concepts/principles that relate to transactions are:
unit of measurement, cost principle, and objectivity
Which of the following statements are true regarding the matching concept?
1|Page
,- Expenses are recorded in the period in which they are incurred.
- Revenues are recorded in the period in which they are earned.
Limiting a firm's ability to switch back and forth between alternative generally accepted
accounting methods is driven by which of the following concepts/principles?
Consistency
Which statement about trend analysis is correct?
It generally leads to a more meaningful analysis when conducted over several years than
does the observation of a single year's ratio result.
The annual rate of return on a six-month investment of $1,000 that earns a return of $100 is
______.
Rate of return= (Amt of Return/Amt Invested)/(Time in Yrs)
20%
How is the amount of interest earned on an investment calculated?
Interest= Principle($) x Rate(%) x Time(Yrs)
Which of the following would represent a correct calculation of interest earned on a six
month, $100 investment?
$100 principal x 10% rate x 6/12 = $5 interest
If margin = 5 percent, net income = $100,000, and turnover = 4.0, then ______.
ROI= (Net Income/Sales) x (Sales/Avg Total Assets)
>> ROI = 20%, average total assets = $500,000, and sales = $2,000,000
*Net Income/Sales=Margin
*Sales/Avg Total Assets=Turnover
Trend analysis of ratios ______.
2|Page
,is a meaningful comparison despite the use of different financial accounting alternatives to
develop the data used in the ratios
In the DuPont model for ROI, margin is calculated as net ___________ divided by
_________________.
income
sales
The annual rate of return on a two-year investment of $1,000 that earns a total return of
$100 is ______.
5%
ROR= ($100/$1000)/2
What do you need to know to calculate the amount of interest earned on an investment?
(Choose every correct answer.)
-The principle amt invested
-The length of time the funds are invested
-The interest rate per year
If turnover is 1.5 times per year and ROI is 9 percent, then margin is ________ percent.
6
If the rate of return on an investment was 10 percent _______.
and $500 was invested for one year, then the return on the investment would have been $50
If sales = $500,000, turnover = 1.5, and net income = $75,000, then _______.
ROI = 22.5% and margin = 15%
>>Margin = $75,000 / $500,000 = 15%
ROI = 15% x 1.5 = 22.5%<<
3|Page
, If stockholders' equity at the beginning of the year = $50,000, stockholders' equity at the
end of the year = $70,000, and ROE = 25 percent, then _______.
average stockholders' equity = $60,000 and net income = $15,000
>>Average stockholders' equity = ($50,000 + $70,000) / 2 = $60,000
Net income = $60,000 x
25% = $15,000<<
In the DuPont model for analyzing ROI, turnover is calculated as _______ divided by average
total _______.
sales
assets
If margin is 4 percent and ROI is 12 percent, then turnover is ______ times per year.
3
Turnover= ROI/Margin
If net income = $20,000 and average stockholders' equity = $80,000, then ROE = __________
percent.
25
ROE= Net Income/Avg Stockholders' equity
A firm's liquidity refers to
its ability to meet its current obligations as they become due
The DuPont model for ROI expresses _____.
turnover as sales / average total assets
Working capital refers to the excess of a firm's ______.
4|Page
