Bus 591

Bus 591 week 1 quiz 1-2

1. Using the following balance sheet and income statement data, what is the current ratio? Current assets | 14,000 |   | Net income | 24,000 |

Current liabilities | 8,000 |   | Stockholders' equity | 42,000 |

Average assets | 80,000 |   | Total liabilities | 18,000 |

Total assets | 60,000 |   |   |

Average common shares outstanding was 10,000 (Points : 1)

       1.75 : 1

       1.6 : 1

       0.57 : 1

       3.3 : 1 |

2. The information needed to determine whether a company is using accounting methods similar to those of its competitors would be found in the (Points : 1)

       auditor's report.

       balance sheet.

       management discussion and analysis section.

       notes to the financial statements. |

3. Ratios that measure the income or operating success of a company for a given period of time are (Points : 1)

       liquidity ratios.

       profitability ratios.

       solvency ratios.

       trending ratios. |

4. The best definition of assets is the (Points : 1)

       cash owned by the company.

       collections of resources belonging to the company and the claims on these resources.

       owners' investment in the business.

       resources belonging to a company have future benefit to the company. |

5. Issuing new shares of common stock will (Points : 1)

       increase retained earnings.

       decrease retained earnings.

       increase common stock.

       decrease common stock. |

6. The periodicity assumption states (Points : 1)

       the business will remain in operation for the foreseeable future.

       the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared.

       every economic entity can be separately identified and accounted for.

       only those things that can be expressed in money are included in the accounting records. |

7. A balance sheet...