Accounting Notes
AC 210 – Spring 2012 Exam 2 Version A
Name: CWID: Score: /100
1. McKinney, Inc has a debt-to-assets ratio of 0.45. This means that:
A. stockholders' equity is 55% of total assets.
B. stockholders' equity is 45% of total assets.
C. the asset turnover ratio also is 0.55.
D. the asset turnover ratio also is 0.45.
2. A company files a Form 10-K with the SEC to submit its:
A. quarterly report.
B. annual report.
C. press releases.
D. report of current events of financial importance.
3. Which of the following accurately describes how accruing advertising expense incurred but not yet paid would affect the ratios indicated? A. Option A
B. Option B
C. Option C
D. Option D
4. Which of the following is TRUE concerning the below information?
A. B. Darin Company is using its assets to generate revenue less efficiently.
B. B. Darin Company is relying more heavily on debt financing than S. Dee Company.
C. Since the net profit margin ratio is higher for S. Dee, that company must be utilizing less debt financing than B. Darin Company.
D. B. Darin is doing a better job at controlling expenses than is S. Dee.
For 5 and 6, use the following information: A company had the same amount of assets at the end of 2011 and 2012, $250,000. In 2012, net income was $20,000 and sales revenue was $400,000. At the end of 2012, total liabilities are $120,000.
5. What is the asset turnover ratio for 2012?
A. 2.08
B. 12.5
C. 1.60
D. 9.75
6. What is the net profit margin ratio for 2012?
A. .07
B. .05
C. .30
D. .12
7. Tuscaloosa Outdoors purchases clothing and outdoor equipment from companies like The North Face and Columbia and sells it to consumers. Tuscaloosa Outdoors is a:
A. merchandising company at the retail level.
B. service company.
C. merchandising company at the wholesale level.
D. manufacturer.
8. Which of the following is an activity in the operations of a manufacturer, but
Name: CWID: Score: /100
1. McKinney, Inc has a debt-to-assets ratio of 0.45. This means that:
A. stockholders' equity is 55% of total assets.
B. stockholders' equity is 45% of total assets.
C. the asset turnover ratio also is 0.55.
D. the asset turnover ratio also is 0.45.
2. A company files a Form 10-K with the SEC to submit its:
A. quarterly report.
B. annual report.
C. press releases.
D. report of current events of financial importance.
3. Which of the following accurately describes how accruing advertising expense incurred but not yet paid would affect the ratios indicated? A. Option A
B. Option B
C. Option C
D. Option D
4. Which of the following is TRUE concerning the below information?
A. B. Darin Company is using its assets to generate revenue less efficiently.
B. B. Darin Company is relying more heavily on debt financing than S. Dee Company.
C. Since the net profit margin ratio is higher for S. Dee, that company must be utilizing less debt financing than B. Darin Company.
D. B. Darin is doing a better job at controlling expenses than is S. Dee.
For 5 and 6, use the following information: A company had the same amount of assets at the end of 2011 and 2012, $250,000. In 2012, net income was $20,000 and sales revenue was $400,000. At the end of 2012, total liabilities are $120,000.
5. What is the asset turnover ratio for 2012?
A. 2.08
B. 12.5
C. 1.60
D. 9.75
6. What is the net profit margin ratio for 2012?
A. .07
B. .05
C. .30
D. .12
7. Tuscaloosa Outdoors purchases clothing and outdoor equipment from companies like The North Face and Columbia and sells it to consumers. Tuscaloosa Outdoors is a:
A. merchandising company at the retail level.
B. service company.
C. merchandising company at the wholesale level.
D. manufacturer.
8. Which of the following is an activity in the operations of a manufacturer, but