| December 10, 2017

Section 1 Financial Statements Analysis1. The percentage analysis of increases and decreases in individual items in comparative financial statements is called2. The percent of fixed assets to total assets is an example of3. An analysis in which all the components of an income statement are expressed as a percentage of net sales is called4. Statements in which all items are expressed only in relative terms (percentages of a common base) are5. The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is referred to as6. Which of the following is NOT an analysis used in assessing solvency?7. The ratio computed by dividing current assets by current liabilities is the8. The ratio of the sum of cash, receivables, and marketable securities to current liabilities is called the9.10. An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to11. Which of the following ratios provides a solvency measure that shows the margin of safety of noteholders or bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?12. The number of times interest charges are earned is computed as13. The _____ measures the profitability of total assets, without considering how the assets are financed.14. For most profitable companies, the rate earned on total assets will be less than Which one of the following is NOT a characteristic generally evaluated in ratio analysis?15. Which additional report is required of independent auditors since the passage of the Sarbanes-Oxley Act in 2002?Section 2 Capital Investment Analysis16. Decisions to install new equipment, replace old equipment, and purchase or construct a new building are examples of17. Which of the following are present value methods of analyzing capital investment proposals?18. By converting dollars to be received in the future into current dollars, the present value methods take into consideration that money19. The primary advantages of the average rate of return method are its ease of computation and the fact that20. Which of the following can be used to place capital investment proposals involving different amounts of investment on a comparable basis for purposes of net present value analysis?21. An analysis of a proposal by the net present value method indicated that the present value exceeded the amount to be invested. Which of the following statements best describes the results of this analysis?22. In general, present value methods of analyzing capital investments are more desirable than methods ignoring present value because23. Which method of evaluating capital investment proposals uses the concept of present value to compute a rate of return?24. When several alternative proposals of the same amount are being considered, the one with the largest net present value is the most desirable. If the alternative proposals involve different amounts of investment, it is useful to prepare a relative ranking of the proposals by using a (n)25. Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows expected from capital investment proposals?The present value index is computed using which of the following formulas?26. Which of the following is a present value method of analyzing capital investment proposals?27. An analysis of a proposal by the net present value method indicated that the present value of future cash inflows exceeded the amount to be invested. Which of the following statements best describes the results of this analysis?28. All of the following are factors that may complicate capital investment analysis EXCEPT29. Which of the following provisions of the Internal Revenue Code can be used to reduce the amount of the income tax expense arising from the capital investment projects?30. Periods in time that experience increasing price levels are known as periods of31. The process by which management allocates available investment funds among competing investment proposals is called32. In capital rationing, an initial screening of alternative proposals is usually performed by establishing minimum standards. Which of the following evaluation methods are normally used?33. In capital rationing, alternative proposals that survive initial and secondary screening are normally evaluated in terms of nonfinancial factorsSection 3 Basic Accounting Concepts34. The basic financial statements do NOT include the tax return35. Which of the following is NOT an element of the financial accounting system?36. Which of the following accounts is a stockholders’ equity account?37. The stockholders’ equity will be reduced by which of the following accounts:38. The gross increases in stockholders’ equity attributable to business activities are called39. A ____ is an economic event that under generally accepted accounting principles affects an element of the financial statements and must be recorded.40. The statement of cash flows is integrated with the balance sheet because41. RST borrowed $25,000 from the bank. Which of the following accurately shows the effects of the transaction?42. Anderson, Inc. paid rent expense of $4,000 for the month of October. How are the accounts affected due to this transaction?43. Anderson, Inc. receives $5,000 cash for fees earned. What is the effect of this transaction?.44. Declaring and paying cash dividends affects which balance sheet accounts?45. If Assets have a balance of $50,000 and Stockholders’ Equity has a balance of $40,000, then Liabilities must have a balance of46. A to Z Corporation engaged in the following transaction “Paid a $10,000 cash dividend.” On the Statement of Cash Flows, the transaction would be classified as47. The income statement for August indicates net income of $50,000. The corporation also paid $10,000 in dividends during the same period. If there were no beginning balance in stockholders’ equity, what is the ending balance in stockholders’ equity?48. The first month of operation showed the net cash from operating activities to be $3,760, the net cash from investing activities to be ($5,415), and the ending cash balance to be $2,425. The net cash from financing activities must be $Section 4 Sarbanes-Oxley, Internal Control, and Cash49. The purpose of the Sarbanes-Oxley Act of 2002 is to50. The Sarbanes-Oxley Act of 2002 requires companies and their independent accountants to51. The objectives of internal control are to52. A firm’s internal control environment is influenced by53. When a firm uses internal auditors, it is adhering to which of the following internal control elements?54. Which of the following is NOT defined as cash?55. The notification accompanying a check that indicates the specific invoice being paid is called a56. EFT57. On the bank’s accounting records, customers’ accounts are normally shown as58. Credit memorandums from the bank59. A bank reconciliation should be prepared periodically because60. The amount of the outstanding checks is included on the bank reconciliation as a (n)61. A special cash fund used to make small payments that occur frequently is called a (n)62. Cash equivalents include63. A minimum cash balance required by a bank is calledSection 5 Budgeting and Standard Cost Systems64. The budget process involves doing all the following EXCEPT65. When department managers plan lower goals than possible in order to build in a cushion for unexpected events, the result is66. The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as67. A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed68. The production budgets are used to prepare which of the following budgets?69. The first budget customarily prepared as part of an entity’s master budget is the70. The budget that summarizes future plans for the acquisition of fixed assets is the71. Estimated cash payments are planned reductions in cash from all of the following EXCEPT72. Management accountants usually provide for a minimum cash balance in their cash budgets for which of the following reasons?73. Planning for capital expenditures is necessary for all of the following reasons EXCEPT74. Standards that represent levels of operation that can be attained with reasonable effort are called75. Periodic comparisons between planned objectives and actual performance are reported in76. The standard price and quantity of direct materials are separated because77. If the price paid per unit differs from the standard price per unit for direct materials, the variance is termed78. If the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is termed79. Variances from standard costs are usually reported to The use of standards for nonmanufacturing expenses is

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