Question 1. The debt ratio is the relationship between
Answer: Total assets and total liabilities
Question 2. Galaxy Donuts has a cash conversion cycle of _______ days, which is a very healthy turnover rate.
Answer: 30
Question 3. A business wanting to incorporate must file articles of incorporation with
Answer: the state office dealing with incorporation.
Question 4. A business's Accounts Payable balance has decreased during the year. How would this affect the statement of cash flows operations section under the indirect method?
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Answer : It is already included in the net income.
Question 5. Which of the following is not a part of financing activities?
Answer: Buying land
Question 6. Hanna Industries has an inventory turnover of 112 days, an accounts payable turnover of 73 days, and an accounts receivable turnover of 82 days. Hanna's cash conversion cycle is
Answer: 121 Days
Question The following information applied to Advanced Industries, Inc. for 2014:
Earnings/share $17.68
Market price per share of common stock $52
Number of shares of common stock outstanding 52,000
Net income $48,000
Dividends/share $7.14
What is the dividend yield for Advanced Industries, Inc. (to the nearest tenth of a percent)?
Answer: 13.7%
Question 8. The formula for computing additional paid-in capital in excess of par is shares of stock times
Answer: Selling price per share minus par value per share.
Question 9. Which of the following causes the par value of a company's stock to decrease?
Answer: Stock split
Question 10. A purchase of new equipment on a note payable under the direct method is reported
Answer: As a separate disclosure as a non-cash transaction.
Question 11. Allied Industrial has net sales of $1,200,000, net income of $85,000, average current assets of $53,000, average fixed assets of $184,000, and average total assets of $237,000. What is Allied Industrial's total asset turnover ratio?
Answer: 0.2
Question 12. Hallett Industries, Inc. reported net sales of $306,000, cost of goods sold of $192,600, operating expenses of $58,900, and income tax expense of 12,300. What is Hallett Industries' net income percentage?
Answer: 13.79
Question 13. Haskins, Inc. sells 1,000 shares of $12 par common stock for $20 per share. The journal entry is
Answer: debit Cash $20,000; credit Common Stock $12,000; credit Paid-In Capital in Excess of Par-Common Stock $8,000 .
Question Motor Works, Inc. has declared a $20,000 cash dividend to shareholders. The company has 5,000 shares of $15-par, 10% preferred stock and 10,000 shares of $20-par common stock. The preferred stock is cumulative. How much will be distributed to the preferred and common stockholders on the date of payment if the preferred stock is $8,000 in arrears?
Answer: $7,500 preferred, $12,500 common
Question 15. Which is a value placed on a certificate for a share of the company's stock?
Answer: Stated value
Question 16. Eagle Ridge, Inc. issued 40 shares of $20 par value stock to its accountant in full payment for her $900 fee for assisting in setting up the new company. The entry for the issuance of the stock is a
Answer: Credit to Common Stock for $800.
Question
17. Tucker Enterprises' Accounts Receivable increased by $48,000, and its Accounts Payable increased by $27,000. What is the net effect on cash from operations under the indirect method?
Answer: –$21,000
Question
18. The stockholders' right of _______ means that stockholders will receive a proportionate share of any assets left after a company goes out of business.
Answer: Liquidation
Question 19. On the _______ of a cash dividend, no journal entry is required.
Answer: Date of record
Question 20. Tucker, Inc.'s net sales decreased from $90,000 in year one to $45,000 in year two, and its cost of goods sold decreased from $30,000 in year one to $20,000 in year two. The vertical analysis based on sales for cost of goods sold for the two periods (rounded to nearest tenth of a percent) is
Answer: 33.3% and 44.4%.
