ACC 232 Final Exam
Which of the following is an example of horizontal analysis?
A. Comparing COGS with sales.
B. Comparing net income across companies.
C. Comparing debt with equity.
D. Comparing the growth in sales over time.
D
Which of the following is correct?
A. Receivables turnover ratio depicts the company's frequency of cash
collections.
B. Inventory turnover ratio can be used to assess the company's frequency of
selling inventory.
C. Current ratio reflects the company's ability to pay current debt.
D. All of the other options are correct.
D
Which of the following ratios is most useful in evaluating liquidity?
A. Return on assets.
B. Return on equity.
C. Times interest earned ratio.
D. Current ratio.
D
Which of the following ratios is most useful in evaluating solvency?
A. Debt to equity ratio.
B. Current ratio.
C. Receivables turnover ratio.
D. Inventory turnover ratio.
A
Which of the following is a sign that a company can quickly turn its receivables
into cash
A. A low receivables turnover ratio.
B. A high receivables turnover ratio.
C. A high average collection period.
D. Both a low receivables turnover ratio and a high average collection period.
B
Which of the following is a negative sign that a company is not selling its
inventory quickly?
A. A low inventory turnover ratio.
B. A high inventory turnover ratio.
C. A low average days in inventory.
D. Both a high inventory turnover ratio and a low average days in inventory.
A
The debt ratio is the relationship between:
A. Current assets and current liabilities.
, B. Current assets and total liabilities.
C. Total assets and total liabilities.
D. Total assets and current liabilities.
C
Common stockholders usually have all of the following rights except:
A. To receive dividends when declared.
B. To share in the distribution of assets.
C. To elect board of directors.
D. To participate in the day-to-day operations.
D
The correct order from the smallest number of shares to the largest number of
shares is:
A. Authorized, issued, and outstanding.
B. Outstanding, issued, and authorized.
C. Issued, outstanding, and authorized.
D. Issued, authorized, and outstanding.
B
When a company issues 25,000 shares of $1 par value common stock for $10 per
share, the journal entry for this issuance would include:
A. A debit to Cash for $25,000.
B. A debit to Additional Paid-in Capital for $25,000.
C. A credit to Common Stock for $250,000.
D. A credit to Additional Paid-in Capital for $225,000.
D
Which of the following financing alternatives has the highest preference of
payment in a case where the company liquidates its assets?
A. Common Stock.
B. Preferred Stock.
C. Bonds.
D. They have equal preference.
C
Which of the following is not a potential feature of preferred stock?
A. Convertible.
B. Redeemable.
C. Cumulative.
D. They all are potential features of preferred stock.
D
Treasury Stock is normally reported as:
A. A reduction of total stockholders' equity.
B. An asset account.
C. A liability account.
D. An expense account.
A
On December 2, Coley Corp. reacquired 1,000 shares of its $2 par value common
stock for $27 each. On December 20, Coley Corp. reissued 400 shares for $15
each. Which of the following is correct regarding the journal entry for the
Which of the following is an example of horizontal analysis?
A. Comparing COGS with sales.
B. Comparing net income across companies.
C. Comparing debt with equity.
D. Comparing the growth in sales over time.
D
Which of the following is correct?
A. Receivables turnover ratio depicts the company's frequency of cash
collections.
B. Inventory turnover ratio can be used to assess the company's frequency of
selling inventory.
C. Current ratio reflects the company's ability to pay current debt.
D. All of the other options are correct.
D
Which of the following ratios is most useful in evaluating liquidity?
A. Return on assets.
B. Return on equity.
C. Times interest earned ratio.
D. Current ratio.
D
Which of the following ratios is most useful in evaluating solvency?
A. Debt to equity ratio.
B. Current ratio.
C. Receivables turnover ratio.
D. Inventory turnover ratio.
A
Which of the following is a sign that a company can quickly turn its receivables
into cash
A. A low receivables turnover ratio.
B. A high receivables turnover ratio.
C. A high average collection period.
D. Both a low receivables turnover ratio and a high average collection period.
B
Which of the following is a negative sign that a company is not selling its
inventory quickly?
A. A low inventory turnover ratio.
B. A high inventory turnover ratio.
C. A low average days in inventory.
D. Both a high inventory turnover ratio and a low average days in inventory.
A
The debt ratio is the relationship between:
A. Current assets and current liabilities.
, B. Current assets and total liabilities.
C. Total assets and total liabilities.
D. Total assets and current liabilities.
C
Common stockholders usually have all of the following rights except:
A. To receive dividends when declared.
B. To share in the distribution of assets.
C. To elect board of directors.
D. To participate in the day-to-day operations.
D
The correct order from the smallest number of shares to the largest number of
shares is:
A. Authorized, issued, and outstanding.
B. Outstanding, issued, and authorized.
C. Issued, outstanding, and authorized.
D. Issued, authorized, and outstanding.
B
When a company issues 25,000 shares of $1 par value common stock for $10 per
share, the journal entry for this issuance would include:
A. A debit to Cash for $25,000.
B. A debit to Additional Paid-in Capital for $25,000.
C. A credit to Common Stock for $250,000.
D. A credit to Additional Paid-in Capital for $225,000.
D
Which of the following financing alternatives has the highest preference of
payment in a case where the company liquidates its assets?
A. Common Stock.
B. Preferred Stock.
C. Bonds.
D. They have equal preference.
C
Which of the following is not a potential feature of preferred stock?
A. Convertible.
B. Redeemable.
C. Cumulative.
D. They all are potential features of preferred stock.
D
Treasury Stock is normally reported as:
A. A reduction of total stockholders' equity.
B. An asset account.
C. A liability account.
D. An expense account.
A
On December 2, Coley Corp. reacquired 1,000 shares of its $2 par value common
stock for $27 each. On December 20, Coley Corp. reissued 400 shares for $15
each. Which of the following is correct regarding the journal entry for the
