TCA 321 EXAM 2 INFO (CHAP 5, 6, & 7) QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE
2026
Which of the following standards is not commonly used in ratio analysis?
A. Ratios from a past period
B. Industry averages
C. Budgeted ratio goals
D. Official standards set by government regulations - Answers D. Official standards set by government
regulations
Which of the following statements about ratio analysis is true?
A. Managers, creditors, and investors have the same purposes in using ratio analysis.
B. Solvency ratios are primarily used by creditors.
C. Ratios are always expressed as percentages.
D. Ratio analysis determines the causes of variances between planned goals and actual results. -
Answers D. Ratio analysis determines the causes of variances between planned goals and actual
results. (INCORRECT)
Assume that the accounts receivable turnover ratio of your company was 19.14 times last year. What
was the average collection period of your company last year?
A. 24.6 days
B. 19.07 days
C. 14.84 days
D. 16.67 days - Answers B. 19.07 days
Which of the following statements about liquidity ratios is true?
A. Owners prefer a high current ratio.
B. Owners prefer a short accounts collection period for accounts receivable.
C. Owners prefer a low accounts receivable turnover ratio.
D. Creditors prefer a low quick ratio. - Answers B. Owners prefer a short accounts collection period
for accounts receivable.
If your hotel's ADR was $285, paid occupancy percentage was 85.2%, and total room revenue was
$413 million last year. What was the RevPar of your hotel last year?
A. $242.82
B. $184.80
C. $192.87
D. Cannot be determined by the information given. - Answers A. $242.82
Which of the following is not a typical example of fixed costs?
A. Salary
B. Property taxes
C. Cost of food sold
D. Depreciation - Answers C. Cost of food sold
Which cost increases the most on a per-unit basis as sales activity decreases?
A. Total
B. Mixed
C. Variable
D. Fixed - Answers D. Fixed
The current cost of food sold at the Pier Restaurant is 35% of sales. If sales increase, the restaurant
manager should generally expect an increase in:
A. total fixed costs.
B. the total cost of food sold.
C. the average variable cost per meal sold.
D. the average fixed cost per meal sold. - Answers C. the average variable cost per meal sold.
(INCORRECT)
In the analysis of leasing alternatives, the indifference point identifies:
A. the level of revenue at which costs are the same for each alternative.
B. the level of revenue at which an alternative is not worth pursuing.
C. the cost at which anticipated revenue is the same for each alternative.
D. the level of cost at which an alternative is not worth pursuing. - Answers A. the level of revenue at
which costs are the same for each alternative.
2026
Which of the following standards is not commonly used in ratio analysis?
A. Ratios from a past period
B. Industry averages
C. Budgeted ratio goals
D. Official standards set by government regulations - Answers D. Official standards set by government
regulations
Which of the following statements about ratio analysis is true?
A. Managers, creditors, and investors have the same purposes in using ratio analysis.
B. Solvency ratios are primarily used by creditors.
C. Ratios are always expressed as percentages.
D. Ratio analysis determines the causes of variances between planned goals and actual results. -
Answers D. Ratio analysis determines the causes of variances between planned goals and actual
results. (INCORRECT)
Assume that the accounts receivable turnover ratio of your company was 19.14 times last year. What
was the average collection period of your company last year?
A. 24.6 days
B. 19.07 days
C. 14.84 days
D. 16.67 days - Answers B. 19.07 days
Which of the following statements about liquidity ratios is true?
A. Owners prefer a high current ratio.
B. Owners prefer a short accounts collection period for accounts receivable.
C. Owners prefer a low accounts receivable turnover ratio.
D. Creditors prefer a low quick ratio. - Answers B. Owners prefer a short accounts collection period
for accounts receivable.
If your hotel's ADR was $285, paid occupancy percentage was 85.2%, and total room revenue was
$413 million last year. What was the RevPar of your hotel last year?
A. $242.82
B. $184.80
C. $192.87
D. Cannot be determined by the information given. - Answers A. $242.82
Which of the following is not a typical example of fixed costs?
A. Salary
B. Property taxes
C. Cost of food sold
D. Depreciation - Answers C. Cost of food sold
Which cost increases the most on a per-unit basis as sales activity decreases?
A. Total
B. Mixed
C. Variable
D. Fixed - Answers D. Fixed
The current cost of food sold at the Pier Restaurant is 35% of sales. If sales increase, the restaurant
manager should generally expect an increase in:
A. total fixed costs.
B. the total cost of food sold.
C. the average variable cost per meal sold.
D. the average fixed cost per meal sold. - Answers C. the average variable cost per meal sold.
(INCORRECT)
In the analysis of leasing alternatives, the indifference point identifies:
A. the level of revenue at which costs are the same for each alternative.
B. the level of revenue at which an alternative is not worth pursuing.
C. the cost at which anticipated revenue is the same for each alternative.
D. the level of cost at which an alternative is not worth pursuing. - Answers A. the level of revenue at
which costs are the same for each alternative.
