ACCT 5312 EXAM 1 With Questions
And Answers 2026|100% Correct
The balance sheet of an entity: - ANSWER>shows amounts that are not adjusted for changes in the purchasing
power of the dollar.
Which of the following is not a limitation of financial statements? - ANSWER>
Accumulated depreciation on a balance sheet: - ANSWER>Represents the portion of the cost of an asset that is
assumed to have been "used up" in the process of operating the business.
Which of the following is a universally accepted measure of profitability? - ANSWER>Return on investment.
Return on equity: - ANSWER>relates net income and stockholders' equity.
A current ratio of 6.0 is usually an indication that the firm: - ANSWER>has not made the most productive use of its
assets.
, Which of the following accounts is part of working capital? - ANSWER>Merchandise Inventory
Which of the following is not usually considered a measure of an entity's liquidity? - ANSWER>Cash ratio.
Mechforce Manufacturing's net income was $420,000 on sales of $14 million. Average assets for the year were $10
million. Margin for the year was: - ANSWER>3.0% Margin=Net income/Sales
If a firm borrowed money on a six-month bank loan, the firm's working capital immediately after obtaining the
loan, relative to its working capital just prior to the loan, would be: - ANSWER>The same.
When comparing entity financial ratios with industry ratios: - ANSWER>it should be assumed that the data result
from the consistent application of alternative accounting methods.
Another term for return on equity is: - ANSWER>none of these.
Rotablade's net income was $600,000 on sales of $24 million for the year. Average assets for the year were $8
million. For the year: - ANSWER>margin was 2.5%, turnover was 3.0, and ROI was 7.5%
And Answers 2026|100% Correct
The balance sheet of an entity: - ANSWER>shows amounts that are not adjusted for changes in the purchasing
power of the dollar.
Which of the following is not a limitation of financial statements? - ANSWER>
Accumulated depreciation on a balance sheet: - ANSWER>Represents the portion of the cost of an asset that is
assumed to have been "used up" in the process of operating the business.
Which of the following is a universally accepted measure of profitability? - ANSWER>Return on investment.
Return on equity: - ANSWER>relates net income and stockholders' equity.
A current ratio of 6.0 is usually an indication that the firm: - ANSWER>has not made the most productive use of its
assets.
, Which of the following accounts is part of working capital? - ANSWER>Merchandise Inventory
Which of the following is not usually considered a measure of an entity's liquidity? - ANSWER>Cash ratio.
Mechforce Manufacturing's net income was $420,000 on sales of $14 million. Average assets for the year were $10
million. Margin for the year was: - ANSWER>3.0% Margin=Net income/Sales
If a firm borrowed money on a six-month bank loan, the firm's working capital immediately after obtaining the
loan, relative to its working capital just prior to the loan, would be: - ANSWER>The same.
When comparing entity financial ratios with industry ratios: - ANSWER>it should be assumed that the data result
from the consistent application of alternative accounting methods.
Another term for return on equity is: - ANSWER>none of these.
Rotablade's net income was $600,000 on sales of $24 million for the year. Average assets for the year were $8
million. For the year: - ANSWER>margin was 2.5%, turnover was 3.0, and ROI was 7.5%
