accounting assignment

1.1Which tools and techniques are most useful to the financial statement analyst?

Select one:

a.The market survey report from the Industry.

b.The letter to the shareholders and a map.

c.Public relations material and pro forma statements prepared by the firm.

d.Common size financial statements and financial ratios.

1.2 The following information relates to extract from financial data of Dorah Willemse Ltd for the ended 31 December 2010:

R

Current assets

65 000

Current liabilities

60 000

Accounts receivables

20 000

Inventory

20 000

Goodwill

40 000

Sales (On Credit)

365 000

Cost of goods sold

280 000

Assume a year has 365 days.

Dorah Willemse's average collection period is________.

Select one:

a.4days

b.24 days

c.9 days

d.20 days

1.3 Which ratio measures the liquidity of a firm?

Select one:

a.Gearing ratio

b.Debt to equity ratio

c.Gross profit margin

d.Current ratio

1.4 Identify the items that would be classified as investing activities on the statement of cash flows.

Select one:

a.Acquisitions of equipment, sale of property and purchase of equity securities.

b.Proceeds from borrowing, payments of dividends, purchases of supplies.

c.Payments for inventory, payments for salaries, cash received from sale of goods.

d.Payments on loans, payments for taxes, payments for rent.

1.5 Which option is included in the adjustments to net income to obtain cash flow from operating activities?

Select one:

a.Payment of dividends and depreciation expense.

b.The change in inventory and depreciation expense.

c.The gain from an asset sale and the payment of dividends.

d.The change in accounts receivable and the acquisition of land.

1.6 What does a higher debt to equity ratio usually indicate about a firm?

Select one:

a.The firm is managing its inventory well and it's not running out of stock

b.The firm is inefficient in the management of inventory and it inventory could be obsolete.

c.The company is a highly geared company and it has more debt on its capital structure.

d.The firm is selling more inventory and it has more cash available

1.7 The following information relates to extract from financial data of Dorah Willemse Ltd for the ended 31 December 2010:

R

Current assets

65 000

Current liabilities

60 000

Accounts receivables

20 000

Inventory

20 000

Goodwill

40 000

Sales (On Credit)

365 000

Cost of goods sold

280 000

Assume a year has 365 days.

Dorah Willemse's quick ratio is______

Select one:

a.0.90 to 1

b.0.87 to 1

c.0.75 to 1

d.1.10 to 1

1.8 What is implied if the accounts receivable account has decreased?

Select one:

a.The firm's sales have increased relative to the prior year.

b.Cash flow from operating activities is greater relative to net income.

c.Cash flow from operating activities is more relative to net income.

d.The cash flow from financing activities is less relative to investments.

1.9 Depreciation is added back in the calculation of operating activities because________.

Select one:

a.it only impacts the cash account if inflation has occurred

b.it results in an increase to cash

c.it results in a decrease to cash

d.it has no impact on the cash account

1.10 Which type of ratios assesses the short-term liquidity of company?

Select one:

a.Quick ratio, accounts receivable turnover, return on assets.

b.Current ratio, inventory turnover, fixed asset turnover.

c.Average collection period, debt ratio, return on assets.

d.Current ratio, quick ratio, cash-flow liquidity ratio.