Multiple Choice Questions

Scout Corporation has income before taxes of $400,000 and an extraordinary loss of $100,If the income tax rate is 25% on all items, the income statement should show income before extraordinary items and extraordinary items, respectively, of
  • 60.8 days
  • 120%
  • $300,000 and $75,000.
  • vertical analysis
Comparisons of data within a company are an example of the following comparative basis:
  • c. Both (a) and (b).
  • Intracompany.
  • net sales.
  • base year amount.
Financial statement information follows as of the end of each year. 2011 2010Stockholders' equity $280,000 $238,000Net income 134,000 90,000Tax expense 22,000 18,000Interest expense 12,000 12,000Dividends paid to preferred stockholders 20,000 20,000Dividends paid to common stockholders 15,000 10,000Compute the times interest earned for 2011.
  • 44.0%
  • 60.8 days
  • 14.0 times
  • 3.0:1
Which of the following measures is an evaluation of a firm's ability to pay current liabilities?
  • c. Both (a) and (b).
  • Both acid-test ratio and current ratio
  • The company is continually reporting pro forma income numbers.
  • Intracompany.
Financial statement information follows as of the end of each year. 2011 2010Inventory $54,000 $48,000Current assets 81,000 106,000Total assets 382,000 326,000Current liabilities 27,000 36,000Total liabilities 102,000 88,000Compute the current ratio for 2011.
  • 3.0:1
  • 60.8 days
  • 44.0%
  • 17.1%
Financial statement information follows as of the end of each year. 2011 2010Inventory $54,000 $48,000Net sales 784,000 697,000Cost of goods sold 306,000 277,000Net income 134,000 90,000Compute the profit margin ratio for 2011.
  • 17.1%
  • 3.0:1
  • 60.8 days
  • 44.0%
Sammy Corporation reported net sales of $300,000, $330,000, and $360,000 in the years, 2009, 2010, and 2011, respectively. If 2009 is the base year, what is the trend percentage for 2011?
  • 17.1%
  • $300,000 and $75,000.
  • 120%
  • 44.0%
A measure useful in evaluating the efficiency in managing inventories is:
  • base year amount.
  • c. Both (a) and (b).
  • net sales.
  • Intracompany.
In vertical analysis, the base amount for depreciation expense is generally:
  • c. Both (a) and (b).
  • base year amount.
  • net sales.
  • Intracompany.
Which situation below might indicate a company has a low quality of earnings?
  • Intracompany.
  • Both acid-test ratio and current ratio
  • The company is continually reporting pro forma income numbers.
  • net sales.
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Multiple Choice Questions
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