Accounting: Balance Sheet and Financial Statements
MULTIPLE CHOICE
1. The percentage analysis of increases and decreases in individual items in comparative financial statements is called a. vertical analysis b. solvency analysis c. profitability analysis d. horizontal analysis
2. Which of the following below generally is the most useful in analyzing companies of different sizes a. comparative statements b. common-sized financial statements c. price-level accounting d. audit report
3. The percent of fixed assets to total assets is an example of e. vertical analysis f. solvency analysis g. profitability analysis h. horizontal analysis
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4. An analysis in which all the components of an income statement are expressed as a percentage of net sales is called i. vertical analysis j. horizontal analysis k. liquidity analysis l. common-size analysis
5. A balance sheet that displays only component percentages is called m. trend balance sheet n. comparative balance sheet o. condensed balance sheet p. common-sized balance sheet
6. One reason that a common-size statement is a useful tool in financial analysis is that it enables the user to q. judge the relative potential of two companies of similar size in different industries r. determine which companies in a single industry are of the same value s. determine which companies in a single industry are of the same size t. make a better comparison of two companies of different sizes in the same industry
7. Under which of the following cases may a percentage change be computed? u. There is no amount in the base year. v. There is a negative amount in the base year and a negative amount in the subsequent year. w. The trend of the amounts is decreasing but all amounts are positive. x. There is a negative amount in the base year and a positive
1. The percentage analysis of increases and decreases in individual items in comparative financial statements is called a. vertical analysis b. solvency analysis c. profitability analysis d. horizontal analysis
2. Which of the following below generally is the most useful in analyzing companies of different sizes a. comparative statements b. common-sized financial statements c. price-level accounting d. audit report
3. The percent of fixed assets to total assets is an example of e. vertical analysis f. solvency analysis g. profitability analysis h. horizontal analysis
.
4. An analysis in which all the components of an income statement are expressed as a percentage of net sales is called i. vertical analysis j. horizontal analysis k. liquidity analysis l. common-size analysis
5. A balance sheet that displays only component percentages is called m. trend balance sheet n. comparative balance sheet o. condensed balance sheet p. common-sized balance sheet
6. One reason that a common-size statement is a useful tool in financial analysis is that it enables the user to q. judge the relative potential of two companies of similar size in different industries r. determine which companies in a single industry are of the same value s. determine which companies in a single industry are of the same size t. make a better comparison of two companies of different sizes in the same industry
7. Under which of the following cases may a percentage change be computed? u. There is no amount in the base year. v. There is a negative amount in the base year and a negative amount in the subsequent year. w. The trend of the amounts is decreasing but all amounts are positive. x. There is a negative amount in the base year and a positive