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Saint Leo MBA560 week 5 quiz

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Question;1.;Which of the following is a potential limitation of financial statement analysis?;(Points: 2);Lack of comparability of firms in different industriesThe impact of changing economic conditionsThe;impact of having more than one acceptable alternative accounting;principle for accounting for a given transaction or economic eventAll of the above;Question 2.;2.;You are considering an investment in Ingram Company stock and;wish to assess the company's position in the stock market. All of the;following ratios can be used for this purpose except;(Points: 2);current ratio.earnings per share.dividend yield.price-earnings ratio.;Question 3.;3.;Select the incorrect statement regarding net margin.;(Points: 2);Net margin refers to the average amount of each sales dollar remaining after all expenses are subtracted.Net margin may be calculated in several ways.The smaller the net margin the better.The amount of net margin is affected by a company?s choices of accounting principles.;Question 4.;4.;Current financial reporting standards assume that users of accounting information;(Points: 2);have a reasonably informed knowledge of business.have only minimal knowledge of business.have an expert?s understanding of economic and financial events and conditions.have widely differing levels of knowledge about business, and that financial reporting must meet these differing needs.;Question 5.;5.;You are considering an investment in Ingram Company stock and;wish to assess the company's position in the stock market. All of the;following ratios can be used for this purpose except;(Points: 2);current ratio.earnings per share.dividend yield.price-earnings ratio.;Question 6.;6.;Common methods of financial statement analysis include all of the following except;(Points: 2);horizontal analysis.incremental analysis.vertical analysis.ratio analysis.;Question 7.;7.;Select the incorrect statement regarding horizontal analysis.;(Points: 2);Percentage analysis involves establishing the relationship of one amount to another.In doing horizontal analysis, an account is expressed as a percentage of the previous balance of the same account.Percentage analysis attempts to eliminate the materiality problem of comparing firms of different sizes.A;horizontal analysis of cost of goods sold on the income statement would;involve dividing cost of goods sold by total sales revenue.;Question 8.;8.;Select the incorrectstatement regarding ratio analysis.;(Points: 2);Ratio analysis is a specific form of horizontal analysis.Ratio analysis involves making comparisons between different accounts in the same set of financial statements.There are many different ratios available for evaluating a firm's performance.Some ratios involve an account from the balance sheet and one from the income statement.;Question 9.;9.;Select the correct statement regarding vertical analysis.;(Points: 2);Vertical analysis of the income statement involves showing each item as a percentage of sales.Vertical analysis of the balance sheet involves showing each asset as a percentage of total assets.Vertical analysis examines two or more items from the financial statements of one accounting period.All of the above are correct.;Question 10.;10.;Solvency refers to a company's ability to;(Points: 2);sell inventory in a timely manner.generate profits from operations.repay liabilities in the long run.generate cash flows to pay current liabilities.;Question 11.;11.;Which of the following should not be recorded as an expense?;(Points: 2);Paid office salariesPaid factory maintenance costsPaid product advertising costsPaid sales commissions;Question 12.;12.;Which of following practices is considered an effective means of re-engineering business systems?;(Points: 2);Identifying the best practices used by world-class competitorsImproving the accuracy of cost allocationsEliminating non-value added activitiesAll of the above;Question 13.;13.;During its first year of operations, Martin Company paid;$4,000 for direct materials and $8,500 for production workers' wages.;Lease payments and utilities on the production facilities amounted to;$7,500 while general, selling, and administrative expenses totaled;$3,000. The company produced 5,000 units and sold 4,000 units at a price;of $7.50 a unit. What is the amount of gross margin for the first year?;(Points: 2);$20,000$12,000$7,500$14,000;Question 14.;14.;Which of the following statements is true with regard to;product costs versus general, selling, and administrative costs?;(Points: 2);Product costs associated with unsold units appear on the income statement as general expenses.General, selling, and administrative costs appear on the balance sheet.Product costs associated with units sold appear on the Income Statement as cost of good sold expense.All of the above.;Question 15.;15.;Which of the following is a product cost for a construction company?;(Points: 2);Cost of transporting raw materials to the job siteSelling costsWages paid to the company's office managerAll of the above;Question 16.;16.;During its first year of operations, Martin Company paid;$4,000 for direct materials and $8,500 for production workers' wages.;Lease payments and utilities on the production facilities amounted to;$7,500 while general, selling, and administrative expenses totaled;$3,000. The company produced 5,000 units and sold 4,000 units at a price;of $7.50 a unit. What is the amount of finished goods inventory for the first year?;(Points: 2);$4,000$5,000$2,500$16,000;Question 17.;17.;Select the incorrect statement regarding upstream and downstream costs.;(Points: 2);Profitability analysis should consider only manufacturing and downstream costs.Companies must recover the total cost of developing, producing, and delivering products.Pricing decisions must consider both upstream and downstream costs.The total cost per unit includes upstream, manufacturing, and downstream costs.;Question 18.;18.;Susan Mason is the manager of one department in a large;store. In this capacity, which of the following kinds of information;would she be interested in?;(Points: 2);Information that is local, relevant, and timelyInformation that is global and pertains to the business as a wholeInformation that meets cost/benefit criteriaBoth A and C;Question 19.;19.;Which of the following is not one of the four Standards of Ethical Conduct for Management Accountants?;(Points: 2);CompetenceConfidentialityIntegrityEducation;Question 20.;20.;As a Certified Management Accountant, Jill is bound by the;standards of ethical conduct issued by the Institute of Management;Accountants. If she accepts an expensive gift from a vendor trying to;win a contract with her firm, which of the following standards will she;violate?;(Points: 2);CompetenceConfidentialityIntegrityObjectivity

 

Paper#45052 | Written in 18-Jul-2015

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