Please help with answers, there are 70 questions of true or false

1. A company paid $9,000 for a six-month insurance policy. The policy coverage began on February 1. On February 28, $150 of 2. A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales wi 3. A company's sales in Year 1 were $250,000 and in Year 2 were $287,500. Using Year 1 as the base year, the sales trend perce 4. A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals 7.85%.: 5. A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals: 6. A ratio expresses a mathematical relation between two quantities and can be expressed as a percent, rate, or proportion.: 7. A salary owed to employees is an example of an accrued expense.: 8. Accumulated depreciation is shown on the statement of financial position as a subtraction from the cost of its related asset. 9. Adjusting entries are designed primarily to correct accounting errors.: 10. Adjusting entries are made after the preparation of financial statements.: 11. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances are correctly recorded.: 12. Adjusting entries result in a better matching of revenues and expenses for the period.: 13. Adjusting entries: 14. All of the following are True regarding prepaid expenses except: 15. An adjusting entry could be made for each of the following except: 16. Analysis of a single financial number is often of limited value. 17. Ben had total assets of $149,501,000, net profit of $6,242,000, and net sales of $209,203,000. Its profit margin was 2.98%. 18. Current assets divided by current liabilities is the: 19. Depreciation expense is an example of an accrued expense. 20. Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the: 21. Evaluation of company performance can include comparison and/or assessment of: 22. External users of financial information: 23. Financial statement analysis: 24. Horizontal analysis is the comparison of a company's financial condition and performance to a base amount.: 25. Horizontal analysis: 26. Internal users of financial information: 27. Liquidity and efficiency are considered to be building blocks of financial statement analysis. 28. Liquidity refers to the availability of resources to meet short-term cash requirements. 29. Net profit (income) divided by average total assets is: 30. Net profit (income) divided by net sales is the: 31. Net sales divided by average total assets is the: 32. On April 1, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. Wh on the annual income statement for the year ended December 31? 33. Quick Assets divided by current liabilities is the: 34. Standards for comparison are necessary when making judgments about a company's performance. 35. Standards for comparison when interpreting financial statement analysis include competitor and industry performance dat 36. The ability to meet short-term obligations and to efficiently generate revenues is called: 37. The ability to provide financial rewards sufficient to attract and retain financing is called: 38. The accounting principle that requires revenue to be recorded when earned is the: 39. The accrual basis of accounting recognizes expenses when cash is paid. 40. The accrual basis of accounting recognizes revenues when cash is received from customers. 41. The accrual basis of accounting reflects the principle that revenue is recorded when it is earned, not when cash is received. 42. The accrual basis of accounting: 43. The adjusting entry to record an accrued expense is: 44. The approach to preparing financial statements based on recognizing revenues when they are earned and matching expens 45. The base amount for a common-size statement of financial position (balance sheet) is usually total assets. 46. The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result 47. The building blocks of financial statement analysis include: 48. The cash basis of accounting is an accounting system in which revenues are recorded when cash is received and expenses a 49. The cash basis of accounting recognizes revenues when cash payments from customers are received. 50. The comparison of a company's financial condition and performance across time is known as: 51. The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets hav 52. The comparison of a company's financial condition and performance to a base amount is known as: 53. The current ratio is calculated as current liabilities divided by current assets. 54. The difference between the cost of an asset and the accumulated depreciation for that asset is called: 55. The higher the accounts receivable turnover, the less quickly accounts receivable are collected. 56. The matching principle does not aim to record expenses in the same accounting period as the revenue earned as a result o 57. The matching principle requires that expenses get recorded in the same accounting period as the revenues that are earned 58. The measurement of key relations among financial statement items is known as: 59. The periodic expense created by allocating the cost of fixed assets to the periods in which they are used, representing the e 60. The return on total assets ratio is a profitability measure. 61. The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expen 62. Three of the most common tools of financial analysis are: 63. Three of the most common tools of financial analysis include horizontal analysis, vertical analysis, and ratio analysis. 64. Total asset turnover reflects a company's ability to use its assets to generate sales and is an important indication of operatin 65. Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods. 66. Two main accounting principles used in accrual accounting are matching and full closure. 67. Under the cash basis of accounting, no adjustments are made for prepaid and accrued items. 68. Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amo 69. Vertical analysis is the comparison of a company's financial condition and performance across time. 70. Vertical analysis is used to reveal patterns in data covering successive periods. QUIZ 2 1. A company paid $9,000 for a six-month insurance policy. The policy coverage began on February 1. On February 28, $150 of insuranc a) False b) True 2. A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lowe a) False b) True 3. A company's sales in Year 1 were $250,000 and in Year 2 were $287,500. Using Year 1 as the base year, the sales trend percent for Ye a) 100%. b) 115%. c) 15%. d) 87%. 4. A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals 7.85%.: a) False b) True 5. A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals: a) 0.0785%. b) 12.73%. c) 1273%. d) 7.85%. 6. A ratio expresses a mathematical relation between two quantities and can be expressed as a percent, rate, or proportion.: a) False b) True 7. A salary owed to employees is an example of an accrued expense.: a) True b) False 8. Accumulated depreciation is shown on the statement of financial position as a subtraction from the cost of its related asset.: a) False b) True 9. Adjusting entries are designed primarily to correct accounting errors.: a) False b) True 10. Adjusting entries are made after the preparation of financial statements.: a) False b) True 11. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances are correctly recorded.: a) False b) True 12. Adjusting entries result in a better matching of revenues and expenses for the period.: a) False b) True 13. Adjusting entries: a) Affect both income statement and balance sheet accounts. b) Affect only cash flow statement accounts. c) Affect only statement of comprehensive income (income statement) accounts. d) Affect only statement of financial position (balance sheet) accounts. 14. All of the following are True regarding prepaid expenses except: a) The adjusting entry for prepaid expenses increases expenses and increases liabilities. b) They are assets. c) They are paid for in advance of receiving their benefits. d) When they are used, their costs become expenses. 15. An adjusting entry could be made for each of the following except: a) Accrued expenses. b) Depreciation. c) Drawings. d) Prepaid expenses. 16. Analysis of a single financial number is often of limited value. a) False b) True 17. Ben had total assets of $149,501,000, net profit of $6,242,000, and net sales of $209,203,000. Its profit margin was 2.98%. a) False b) True 18. Current assets divided by current liabilities is the: a) Current ratio b) Debt ratio c) Quick ratio d) Liquidity ratio 19. Depreciation expense is an example of an accrued expense. a) False b) True 20. Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the: a) Days' sales in inventory b) Inventory turnover ratio c) Profit margin d) Current ratio 21. Evaluation of company performance can include comparison and/or assessment of: a) Current financial position. b) Current performance. c) Past performance. d) All of these 22. External users of financial information: a) Are not directly involved in operating the company. b) Are those individuals involved in managing and operating the company. c) Include internal auditors and consultants.; Make strategic decisions for a company. d) Make strategic decisions for a company. 23. Financial statement analysis: a) All of these. b) Helps to reduce uncertainty in decision-making. c) Helps users to make better decisions. d) Involves transforming accounting data into useful information for decision-making. 24. Horizontal analysis is the comparison of a company's financial condition and performance to a base amount.: a) False b) True 25. Horizontal analysis: a) Is a method used to evaluate changes in financial data across time b) Is a tool used to evaluate financial statement items relative to industry statistics c) Is also called vertical analysis d) Is the presentation of financial ratios 26. Internal users of financial information: a) Are not directly involved in operating a company. b) Are those individuals involved in managing and operating the company c) Include shareholders and lenders. d) Include directors and customers. 27. Liquidity and efficiency are considered to be building blocks of financial statement analysis. a) False b) True 28. Liquidity refers to the availability of resources to meet short-term cash requirements. a) False b) True 29. Net profit (income) divided by average total assets is: a) Days' income in assets. b) Profit margin. c) Return on total assets. d) Total asset turnover. 30. Net profit (income) divided by net sales is the: a) Current ratio. b) Profit margin. c) Return on total assets. d) Total asset turnover. 31. Net sales divided by average total assets is the: a) Current ratio. b) Profit margin. c) Total asset turnover. d) Sales return ratio. 32. On April 1, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What will be on the annual income statement for the year ended December 31? a) $1,012.50. b) $1,350.00. c) $337.50. d) $450.00. 33. Quick Assets divided by current liabilities is the: a) Acid-test ratio. b) Current liability turnover ratio. c) Current ratio. d) Working capital ratio. 34. Standards for comparison are necessary when making judgments about a company's performance. a) False b) True 35. Standards for comparison when interpreting financial statement analysis include competitor and industry performance data. a) True b) False 36. The ability to meet short-term obligations and to efficiently generate revenues is called: a) Liquidity and efficiency. b) Profitability. c) Market prospects. d) Solvency. 37. The ability to provide financial rewards sufficient to attract and retain financing is called: a) Liquidity and efficiency. b) Market prospects. c) Solvency. d) Profitability. 38. The accounting principle that requires revenue to be recorded when earned is the: a) Accrual reporting principle. b) Matching principle. c) Revenue recognition principle. d) Time period assumption. 39. The accrual basis of accounting recognizes expenses when cash is paid. a) False b) True 40. The accrual basis of accounting recognizes revenues when cash is received from customers. a) False b) True 41. The accrual basis of accounting reflects the principle that revenue is recorded when it is earned, not when cash is received. a) False b) True 42. The accrual basis of accounting: a) Is flawed because it gives complete information about cash flows. b) Is generally accepted for external reporting because it is more useful than cash basis for most business decisions. c) Recognizes expenses when paid in cash. d) Recognizes revenues when received in cash. 43. The adjusting entry to record an accrued expense is: a) Decrease a liability; increase revenue. b) Increase an asset; increase revenue. c) Increase an expense; decrease an asset. d) Increase an expense; increase a liability. 44. The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to tho a) Accrual basis accounting. b) Cash basis accounting. c) The matching principle. d) The time period assumption. 45. The base amount for a common-size statement of financial position (balance sheet) is usually total assets. a) False b) True 46. The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the ex a) Cash basis of accounting. b) Cost principle. c) Matching principle. d) Recognition principle. 47. The building blocks of financial statement analysis include: a) All of these. b) Liquidity and efficiency. c) Profitability. d) Solvency. 48. The cash basis of accounting is an accounting system in which revenues are recorded when cash is received and expenses are record a) False b) True 49. The cash basis of accounting recognizes revenues when cash payments from customers are received. a) False b) True 50. The comparison of a company's financial condition and performance across time is known as: a) Financial reporting. b) Horizontal analysis. c) Vertical analysis. d) Political analysis. 51. The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been o a) Is only recorded when the asset is disposed of. b) Is referred to as accumulated depreciation. c) Is referred to as depreciation expense. d) Is shown on the income statement of the final period. 52. The comparison of a company's financial condition and performance to a base amount is known as: a) Financial reporting. b) Investment analysis. c) Horizontal ratios. d) Vertical analysis. 53. The current ratio is calculated as current liabilities divided by current assets. a) False b) True 54. The difference between the cost of an asset and the accumulated depreciation for that asset is called: a) Carrying Amount. b) Depreciation Expense. c) Prepaid Depreciation. d) Depreciation Value. 55. The higher the accounts receivable turnover, the less quickly accounts receivable are collected. a) False b) True 56. The matching principle does not aim to record expenses in the same accounting period as the revenue earned as a result of these e a) False b) True 57. The matching principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a resu a) False b) True 58. The measurement of key relations among financial statement items is known as: a) Financial reporting. b) Horizontal analysis. c) Ratio analysis. d) Investment analysis. 59. The periodic expense created by allocating the cost of fixed assets to the periods in which they are used, representing the expense o a) A contra account. b) Accumulated depreciation. c) Depreciation expense. d) The matching principle. 60. The return on total assets ratio is a profitability measure. a) False b) True 61. The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses whe a) Accrual basis accounting. b) Cash basis accounting. c) Operating cycle accounting. d) Revenue recognition accounting. 62. Three of the most common tools of financial analysis are: a) Financial reporting, ratio analysis, vertical analysis. b) Horizontal analysis, vertical analysis, ratio analysis. c) Ratio analysis, horizontal analysis, financial reporting. d) Trend analysis, financial reporting, ratio analysis. 63. Three of the most common tools of financial analysis include horizontal analysis, vertical analysis, and ratio analysis. a) False b) True 64. Total asset turnover reflects a company's ability to use its assets to generate sales and is an important indication of operating efficie a) False b) True 65. Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods. a) False b) True 66. Two main accounting principles used in accrual accounting are matching and full closure. a) False b) True 67. Under the cash basis of accounting, no adjustments are made for prepaid and accrued items. a) False b) True 68. Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount. a) False b) True 69. Vertical analysis is the comparison of a company's financial condition and performance across time. a) False b) True 70. Vertical analysis is used to reveal patterns in data covering successive periods. a) False b) True