Multiple Choice
47. Which of the following is
not
a common type of comparison in accounting?
a. Comparisons of sales growth between companies.
b. Comparisons of earnings per share between companies.
c. Comparisons of earnings this year with earnings for the same company last year.
d. Comparisons to industry.
48. When using vertical analysis,we express income statement accounts as a percentage of
a. Net income.
b. Gross profit.
c. Sales.
d. Total assets.
49. When using vertical analysis, we express balance sheet accounts as a percentage of
a. Sales.
b. Total assets.
c. Total liabilities.
d. Total stockholders’ equity.
50. Which of the following is an example of vertical analysis?
a. Comparing gross profit across companies.
b. Comparing income statement items as a percentage of sales.
c. Comparing debt with industry averages.
d. Comparing the change in sales over time.
51. Comparing operating expenses as a percentage of sales is an example of:
a. Vertical analysis.
b. Horizontal analysis.
c. Diagonal analysis.
d. Both vertical and horizontal analysis.
52. The following is an example of:
|
Amount
|
%
|
Cash
|
$ 300,000
|
6.0
|
Accounts receivable
|
500,000
|
10.0
|
Inventory
|
800,000
|
16.0
|
Long-term assets
|
3,400,000
|
68.0
|
Total assets
|
$5,000,000
|
100.0
|
|
|
|
a. Vertical analysis.
b. Horizontal analysis.
c. Diagonal analysis.
d. Both vertical and horizontal analysis.
53. The following is an example of:
|
Year
|
Increase (Decrease)
|
|
2015
|
2014
|
Amount
|
%
|
Cash
|
$ 300,000
|
$ 800,000
|
$ (500,000)
|
(62.5)
|
Accounts receivable
|
500,000
|
200,000
|
300,000
|
150.0
|
Inventory
|
800,000
|
700,000
|
100,000
|
14.3
|
Long-term assets
|
3,400,000
|
2,300,000
|
1,100,000
|
47.8
|
Total assets
|
$5,000,000
|
$4,000,000
|
$1,000,000
|
25.0
|
|
|
|
|
|
|
|
|
|
|
a. Vertical analysis.
b. Horizontal analysis.
c. Diagonal analysis.
d. Both vertical and horizontal analysis.
54. Horizontal analysis examines trends in a company
a. Over time.
b. Between income statement accounts in the same year.
c. Between balance sheet accounts in the same year.
d. Between income statement and balance sheet accounts in the same year.
55. Which of the following is an example of horizontal analysis?
a. Comparing COGS with sales.
b. Comparing net income across companies.
c. Comparing debt with equity.
d. Comparing the growth in sales over time.
56. Which of the following is an example of horizontal analysis?
a. Comparing gross profit across companies.
b. Comparing gross profit with operating expenses.
c. Comparing assets with equity.
d. Comparing the change in sales over time.