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ew homework for monday 11/29/2010 Which of the following is not an example of an internal user of a company’s financial statements? a. member of the board of directors b. department head c. stockholder d. top-level manager
2. Which of the following is the correct form of the equation that is the basis for preparing the income statement? a. Revenue = Expenses – Net Income b. Revenue - Expenses = Net Income c. Line Amount ÷ Net Sales = Common-Size Percentage d. Sales – Cost of Sales = Gross Profit
3. An external income statement must comply with the pronouncements of which of the following? a. American Institute of Certified Public Accountants b. Financial Accounting Standards Board c. Percentage Change Board of Review d. a and b
4. Interpretation of data shown on a common-size income statement can be simplified by: a. zeroing out the income statement bookkeeping accounts. b. classifying dividends as a business expense. c. restating the percentages as a component of the sales dollar. d. redesigning the statement.
5. Which of the following sentences about the statement of retained earnings is true? a. It is not prepared for incorporated businesses. b. It uses common-size percentages rounded to one decimal place. c. It is never combined with the income statement. d. It may be combined with the income statement
. 6. Which of the following types of ratios represent the goals of management? a. prior-period ratios b. industry ratios c. budgeted ratios d. stock valuation ratios
7. The occupancy percentage is computed by dividing: a. paid rooms occupied by rooms available. b. rooms available by paid rooms occupied. c. paid rooms occupied by net room sales. d. net room sales by paid rooms occupied.
8. Which of the following terms refers to the total labor and materials used in a production or selling process? a. benchmarks b. prime costs c. equity d. expense margin
9. The inventory turnover ratio formula uses: a. the beginning inventory amount. b. the ending inventory amount. c. the number of days in the operating year. d. an average of inventories for the period
. 10. Which of the following ratios is popular with the investment community for evaluating whether a stock is reasonably priced? a. industry ratio b. return on equity ratio c. price earnings ratio d. earnings per share ratio
11. Which of the following is not a major section of a hotel’s balance sheet? a. revenue b. assets c. liabilities d. equity
12. Among current assets, cash includes all of the following except:a. checking and savings accounts. b. bank accounts with restricted use. c. certificates of deposit. d. house banks.
13. China, glassware, silver, and linen belong in which category of assets? a. inventories b. investments c. property and equipment d. other assets
14. Which of the following is true of unearned revenue? a. It is dependent upon the equity transactions that have occurred. b. It results when a hotel collects room or banquet deposits from guests before any services have been rendered. c. It may appear on a balance sheet under another name. d. b and c
15. Which of the following types of balance sheets presents data for two or more periods? a. comparative b. common-size c. account format d. report format
16. Which of the following ratios indicates the ability of a company to meet its short-term obligations? a. current ratio b. debt-to-equity ratio c. fixed asset turnover ratio d. return on shareholders’ equity ratio
17. The fixed asset turnover ratio requires the use of which of the following financial statements? a. income statement b. working capital worksheet c. balance sheet d. a and c
For questions 18 through 20, refer to the following financial statements for the Doray Restaurant: Balance Sheet—December 31, 20X9 and 20X8 Current Assets 20X9 20X8 Cash $ 34,500 $ 30,269 Accounts Receivable 1,450 1,897 Food Inventory 4,100 1,850 Supplies Inventory 3,900 3,100 Prepaid Expenses 2,600 2,460 Total Current Assets 46,550 39,576 Property and Equipment Total 146,300 146,493 Less Accumulated Depreciation 35,000 29,000 Net Property and Equipment 111,300 117,493 Other Assets 4,500 5,000 Total Assets $ 162,350 $162,069 Current Liabilities 36,350 28,536 Long-Term Liabilities 40,000 46,000 Total Liabilities 76,350 74,536 Total Shareholders’ Equity 86,000 87,533 Total Liabilities and Shareholders’ Equity $ 162,350 $ 162,069 Income Statement—For the year ended December 31, 20X9 Net Revenue $ 173,000 Cost of Food Sold 58,960 Gross Profit 114,040 Total Operating Expenses 76,793 Income before Fixed Charges and Income Taxes 37,247 Total Fixed Costs 20,400 Income before Income Taxes 16,847 Income Taxes 1,200 Net Income $ 15,647
18. The current ratio is: a. 1.64. b. 1.28. c. .78. d. .61.
19. The quick ratio is: a. .88. b. .99. c. 1.11. d. 1.28. 20. The accounts receivable turnover ratio is: a. .03. b. 9.3. c. 103.3. d. 119.3.
21. Which of the following types of ratios represent the goals of management? a. prior-period ratios b. industry ratios c. budgeted ratios d. stock valuation ratios 22. The occupancy percentage is computed by dividing: a. paid rooms occupied by rooms available. b. rooms available by paid rooms occupied. c. paid rooms occupied by net room sales. d. net room sales by paid rooms occupied. 23. Which of the following terms refers to the total labor and materials used in a production or selling process? a. benchmarks b. prime costs c. equity d. expense margin 24. The inventory turnover ratio formula uses: a. the beginning inventory amount. b. the ending inventory amount. c. the number of days in the operating year. d. an average of inventories for the period. 25. Which of the following ratios is popular with the investment community for evaluating whether a stock is reasonably priced? a. industry ratio b. return on equity ratio c. price earnings ratio d. earnings per share ratio - Show quoted text -
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