Financial Statement Analysis Questions
FINANCIAL STATEMENT ANALYSIS
ACCT 7815
MID-TERM EXAM SPRING 2015
NAME:
STUDENT ID:
THERE ARE 30 MULTIPLE CHOICES QUESTIONS WITH EACH QUESTION WORTH 3 POINTS (TOTAL POINTS: 90)
1.
Which of the following ratios is not generally considered to be helpful in assessing short-term liquidity? A.
Acid-test ratio
B.
Current ratio
C.
Days' to collect receivables
D.
Total asset turnover
2.
Which of the following statements is incorrect? A.
Current assets are expected to be converted into cash sooner than noncurrent assets.
B.
Equity investors have unlimited downside exposure if the company declares bankruptcy.
C.
Paid-in capital of company is not affected by the payment of dividends.
D.
Retained earnings at the inception of a company equals zero.
3.
Which of the following statements about accruals is true? A.
Accrual income is less relevant than cash flow.
B.
Accruals cannot be manipulated.
C.
Accruals are less reliable than cash flows.
D.
All accrual accounting adjustments are value irrelevant.
4.
Economic income measures change in:
A. asset value.
B.
liability value.
C.
shareholder value.
D.
net cash flows.
5.
Accounting income consists of all the following components except: A. permanent component.
B.
transitory component.
C.
value irrelevant component.
D.
realized component.
6.
Recording a long-term lease as an operating lease, as opposed to a capital lease, for a lessee will cause the following ratios to be:
A.
Option A
B.
Option B
C.
Option C
D.
Option D
7.
When considering defined benefit pension plans, which of the following will not increase the projected benefit obligation (PBO)? A.
A decrease in the discount rate
B.
An increase in estimated compensation growth
C.
An increase in expected average length of lives of employees
D.
A decrease in the expected rate of return on plan assets
8.
One way for a company to increase its book value per share is to: A. issue long-term debt.
ACCT 7815
MID-TERM EXAM SPRING 2015
NAME:
STUDENT ID:
THERE ARE 30 MULTIPLE CHOICES QUESTIONS WITH EACH QUESTION WORTH 3 POINTS (TOTAL POINTS: 90)
1.
Which of the following ratios is not generally considered to be helpful in assessing short-term liquidity? A.
Acid-test ratio
B.
Current ratio
C.
Days' to collect receivables
D.
Total asset turnover
2.
Which of the following statements is incorrect? A.
Current assets are expected to be converted into cash sooner than noncurrent assets.
B.
Equity investors have unlimited downside exposure if the company declares bankruptcy.
C.
Paid-in capital of company is not affected by the payment of dividends.
D.
Retained earnings at the inception of a company equals zero.
3.
Which of the following statements about accruals is true? A.
Accrual income is less relevant than cash flow.
B.
Accruals cannot be manipulated.
C.
Accruals are less reliable than cash flows.
D.
All accrual accounting adjustments are value irrelevant.
4.
Economic income measures change in:
A. asset value.
B.
liability value.
C.
shareholder value.
D.
net cash flows.
5.
Accounting income consists of all the following components except: A. permanent component.
B.
transitory component.
C.
value irrelevant component.
D.
realized component.
6.
Recording a long-term lease as an operating lease, as opposed to a capital lease, for a lessee will cause the following ratios to be:
A.
Option A
B.
Option B
C.
Option C
D.
Option D
7.
When considering defined benefit pension plans, which of the following will not increase the projected benefit obligation (PBO)? A.
A decrease in the discount rate
B.
An increase in estimated compensation growth
C.
An increase in expected average length of lives of employees
D.
A decrease in the expected rate of return on plan assets
8.
One way for a company to increase its book value per share is to: A. issue long-term debt.