Liquidity ratios indicate a company's short-term debt-paying ability. These ratios include: (Select all that apply). Each incorrect answer results in a negative point mark.

Select one or more:

a. Acid-test (quick) ratio.

b. Inventory turnover.

c. Accounts receivable turnover.

d. Cash flow liquidity ratio.

e. Total assets turnover.

f. Stock Value to Sales ratio.

g. Equity ratio.

h. Number of days' sales in accounts receivable.

i. Current, or working capital, ratio.

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Profitability tests are an important measure of a company's operating success. These tests include(Mark all that apply). Each incorrect answer results in a negative point mark.

Select one or more:

a. Acid-test (quick) ratio.

b. Times interest earned ratio.

c. Cash flow margin.

d. Times preferred dividends earned ratio.

e. Net income to net sales.

f. Inventory turnover.

g. Return to average common stockholders' equity.

h. Earnings per share of common stock.

i. Rate of return on operating assets.

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Market tests help investors and potential investors assess the relative merits of the various stocks in the marketplace. These tests include: (Mark all that apply). Each incorrect answer results in a negative point mark.

Select one or more:

a. Acid-test (quick) ratio.

b. Inventory turnover.

c. Dividend yield on preferred stock.

d. Dividend yield on common stock.

e. Earnings yield on common stock.

f. Cash flow per share of common stock.

g. Payout ratio on common stock.

h. Price-earnings ratio.

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QUESTION 1

The ownership of a corporation is represented by:

		shares of stock.
		the owner's capital account.
		the revenue account.
		cash in bank account.

QUESTION 2

How many classifications does a Capital Stock Account have?

		One
		Two
		Three
		Four

QUESTION 3

The equity contributed by stockholders and equity earned throughbusiness profits represent the stockholders' equity for a:

		partnership firm.
		sole proprietorship.
		corporation.
		none of these.

QUESTION 4

Retained earnings are a part of a/an:

		asset account.
		permanent account.
		stockholders' equity account.
		temporary account.

QUESTION 5

How many sections does an Income Statement have?

		Two
		Three
		Four
		Five

QUESTION 6

Net sales are related to the:

		net income section.
		gross profit on sales section.
		revenue section.
		cost of merchandise sold section.

QUESTION 7

Sales discount and sales return and allowance are:

		revenue accounts.
		contra revenue accounts.
		permanent accounts.
		contra expenses accounts.

QUESTION 8

The total cost related to merchandise purchases during anaccounting period is the:

		net purchase.
		cost of merchandise sold.
		cost of merchandise available for sale.
		beginning merchandise inventory.

QUESTION 9

The gross profit on sale is $65,000, and operating expenses is$35,000. What will be the operating profit?

		$65,000
		$35,000
		$100,000
		$30,000

QUESTION 10

A balance sheet has the following sections:

		Assets, liabilities, and stockholders' equity.
		Income, expenses, and stockholders' equity.
		Assets, liabilities, and income.
		Operating income, operating expenses, and stockholders'equity.

QUESTION 11

A cash flow statement is used to assess the:

		net increase or decrease of cash.
		net increases of cash only.
		net decrease of cash only.
		net profit or loss of business.

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Homework Help 3,900,000

Accounting 580,000

	A.	ROE is used to measure the profitability of the firm in relationto the amount invested by stockholders.
	B.	A company's ROE is lower than its return on investment becauseROE does not consider that part of the business that is financed bydebt.
	C.	ROE is affected by a company's use of leverage.
	D.	ROE equals net income divided by total stockholders' equity.