Recent Question

The current ratio is a measure of the ability of a company to pay its short-term liabilities True or false: 1. The current ratio is a measure of the ability of a company to pay its short-term liabilities out of short-term assets. 2. The inventory turnover ratio measures the number of days the average balance of accounts receivable is outstanding before being converted into cash. 3. Inventory turnover is a measure of liquid ...

Other / Other 22 Apr 2016

A high accounts receivable turnover ratio indicates 1. The accounts receivable turnover and inventory turnover ratios are used to analyze a. long-term debt-paying ability. b. profitability. c. leverage. d. liquidity. 2. A high accounts receivable turnover ratio indicates a. customers are making payments quickly. b. a large portion of the company's sales are on credit. c. many customers are not paying their receivables. d ...

Other / Other 22 Apr 2016

A primary purpose of vertical analysis is to observe trends TRUE/FALSE 1. In horizontal analysis, the base year can be the immediately preceding period, or it can be a period further in the past. 2. A primary purpose of vertical analysis is to observe trends over a three-year period. 3. Common-size analysis expresses each item in a financial statement as a percent of a base amount. 4. In vertical analysi ...

Other / Other 22 Apr 2016

Short-term creditors are usually most interested in assessing 1. For meaningful analysis, ratios are best compared with a. historical company averages. b. industrial averages. c. historical and industrial averages. d. no standard. 2. Short-term creditors are usually most interested in assessing a. leverage. b. liquidity. c. marketability. d. profitability. 3. A common measure of liquidity is a. return on to ...

Other / Other 22 Apr 2016

Creditors would like the debt-to-equity ratio 1. The _________________ uses the income statement to assess a company’s ability to service its debt. 2. The ________________ is computed by dividing a company’s total liabilities by its total assets. 3. ______________ and ____________ are the two major sources of capital. 4. The ________________ is calculated by dividing total liabilities by total stockholdersà ...

Other / Other 22 Apr 2016

Recording amortization each period is an application of the matching principle TRUE OR FALSE: 1. Recording amortization each period is an application of the matching principle. 2. The Accumulated Amortization account represents a cash fund available to replace capital assets. 3. In calculating amortization, both capital asset cost and useful life are based on estimates. 4. Using the units-of-activity method of amortizing factor ...

Other / Other 20 Apr 2016

Copyrights are granted by the federal government 1. A patent a. has a legal life of 40 years. b. is nonrenewable. c. can be renewed indefinitely. d. is rarely subject to litigation because it is an exclusive right. 2. If a company incurs legal costs in successfully defending its patent, these costs are recorded by debiting a. Legal Expense. b. an Intangible Loss account. c. the Patent account. d. an operating exp ...

Other / Other 20 Apr 2016

The balance in the Accumulated Amortization account represents 1. Interest may be included in the acquisition cost of a capital asset a. during the construction period of a self-constructed asset. b. if the asset is purchased on credit. c. if the asset acquisition is financed by a long-term note payable. d. if it is a part of a lump-sum purchase. 2. The balance in the Accumulated Amortization account represents the a. cas ...

Other / Other 20 Apr 2016

The purpose of accruing future removal and site restoration costs 1. Natural resource amortization is a. a decrease in market value of natural resources. b. the amount of spoilage that occurs when natural resources are extracted. c. the process of allocating the cost of natural resources to expense. d. the method used to record unsuccessful oil well explorations. 2. To qualify as natural resources in the accounting sense, ...

Other / Other 20 Apr 2016

Expenditures that maintain the operating efficiency 1. Expenditures that maintain the operating efficiency and expected productive life of a capital asset are generally a. expensed when incurred. b. capitalized as a part of the cost of the asset. c. debited to the Accumulated Amortization account. d. not recorded until they become material in amount. 2. Which of the following is not true of ordinary repairs? a. They pri ...

Other / Other 20 Apr 2016