answers to accounting ii quiz questions part 4 417370

1. Question :

Discontinued operations need to be treated separately from regular business operations on the ________.

CORRECT income statement

2. Question :

A technique for evaluating a series of financial statement data over a period of time is called ________ analysis.

CORRECT horizontal

3. Question :

The cash from operations to current liabilities ratio is a ________ ratio.

CORRECT liquidity

4. Question :

The return on assets ratio is a ________ ratio. 10. ________

CORRECT profitability

5. Question :

Ratios used to determine whether or not a company can earn a satisfactory rate of return are ________.

CORRECT profitability ratios

6. Question :

Ratios used to determine whether or not a company’s stock is a good investment are ________

CORRECT market indicators

7. Question :

Profitability ratios are used to determine whether or not a ________.

CORRECT company can earn a satisfactory rate of return

8. Question :

Investors diversify in order to ________.

CORRECT minimize the risks of stock ownership

9. Question :

Comprehensive income is the total ________.

CORRECT of all items that affect shareholders’ equity except transactions with the owners

10. Question :

If a company plans to hold debt securities until they mature, they are called ________.

CORRECT held to maturity securities

11. Question :

Earnings per share equals ________.

CORRECT net income divided by the weighted average shares of outstanding common stock

12. Question :

X Company began selling appliances this year. The company president has decided not to record any warranty expense or estimated warranty liability because the company’s products are so good that he does not expect to have to make any warranty repairs. This accounting choice would be considered ________.

CORRECT aggressive

13. Question :

W Company just bought ten new cars for its salespeople to use. The company expects to use these cars for two or three years and then replace them. If W Company calculates straight line depreciation using an estimated useful life of three years, this accounting choice would be considered ________.

CORRECT aggressive

14. Question :

Tastee Bakery just bought a new delivery truck, which the bakery plans to use for four or five years before replacing it. If the company calculates straight line depreciation using an estimated useful life of five years, this accounting choice would be considered ________.

CORRECT aggressive

15. Question :

How can you tell if a company is taking big bath charges this year?

CORRECT Compare this year’s income statement with several previous years’, looking for unusual expenses or write offs.

16. Question :

Which of the following may indicate a company is setting up a cookie jar reserve this year?

CORRECT The current year’s estimated warranty liability is significantly larger than prior years’.

17. Question :

Which of the following is evidence of a company’s positive ethical climate?

CORRECT The company’s executives require all new employees to attend an ethics workshop.

18. Question :

Who is responsible for a company’s internal controls?

CORRECT the CEO and CFO

19. Question : Which of the following is an indication of good corporate governance?

CORRECT A company has a board of directors with highly qualified members who are independent of the management team.

20. Question :

IFRS are more ________.

CORRECT principle based than U.S. GAAP