157.Comparisons can be made on each of the following bases
except
a.industry averages.
b.intercompany basis.
c.intracompany basis.
d.All of these answer choices are basis for comparison.
158. Comparisons of data within a company are an example of which one of the following comparative bases?
a.Industry averages
b.Intercompany
c.Intracompany
d.Interregional
159. Silva Corporation reported net sales of $400,000, $700,000, and $900,000 in the years 2013, 2014, and 2015 respectively. If 2013 is the base year, what is the trend percentage for 2015?
a.129%
b.135%
c.164%
d.225%
160.In vertical analysis, the base amount for each income statement item is
a.gross profit.
b.net income.
c.net sales.
d.sales.
161.When performing vertical analysis, the base amount for administrative expenses is generally
a.administrative expenses in a previous year.
b.net sales.
c.gross profit.
d.fixed assets.
162.Ratios that measure the short-term ability of the company to pay its maturing obligations are
a.liquidity ratios.
b.profitability ratios.
c.solvency ratios.
d.trend ratios.
163. What type of ratios best measure the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash?
a.Leverage
b.Solvency
c.Profitability
d.Liquidity
164. The acid-test ratio is also known as the
a.current ratio.
b.quick ratio.
c.fast ratio.
d.times interest earned ratio.
165. The debt to total assets ratio
a.is a solvency ratio.
b.is computed by dividing total assets by total debt.
c.measures the total assets provided by shareholders.
d.is a profitability ratio.
166.Patrick, Inc. decided on January 1 to discontinue its telescope manufacturing division. On July 1, the division’s assets with a book value of $1,260,000 are sold for $900,000. Operating income from January 1 to June 30 for the division amounted to $150,000. Ignoring income taxes, what total amount should be reported on Patrick’s income statement for the current year under the caption, Discontinued Operations?
a.$150,000
b.$210,000 loss
c.$360,000 loss
d.$510,000
167.When there has been a change in accounting principle,
a.the old principle should be used in reporting the results of operations for the current year.
b.the cumulative effect of the change should be reported in the current year’s retained earnings statement.
c.the change should be reported retroactively.
d.the new principle should be used in reporting the results of operations of the current year, but there is no change to prior years.
Answers to Multiple Choice Questions