Financial accounting ivy SoFtware Final exaM lateSt 2026
actual QueStionS and veriFied anSwerS (lateSt
update) a+ grade 100% guarantee veriFied By expertS
From a bankers perspective, the most important ratio on the customers financial
statement is - ANSWER-Current Ratio
Economic Entity - ANSWER-one firm, one set of books
Which of the following is an operating performance ratio?
Debt to total assets
Times interest earned
Payout ratio
Times interest earned and payout ratio
None - ANSWER-Times interest earned and Payout Ratio
Going Concern - ANSWER-a firm has value beyond the liquidation value of its assets
Horizontal analysis compares the components of a balance sheet with a base item. T/F -
ANSWER-False
Monetary Unit - ANSWER-financial transactions are denominated in a stable unit of
measure
Since companies have different numbers of shares outstanding, it is not useful to
compare earnings per share ratios. T/F - ANSWER-True
Accounting Periods - ANSWER-the result of operations for an entity must be reported
on a periodic basis, usually a year
,There are two ratios that help define the operating cycle. They are:
receivables and inventory turnover
receivables and accounts payable
inventory and accounts payable turnover
none of these - ANSWER-Receivables and accounts payable
Revenue/Epense matching - ANSWER-accounting entities should aspire to recognize
expenses in the same accounting periods as the revenues they generate
The ratio that shows the markup in price over the cost of goods sold is
profit margins
gross margin ratio
return on assets
asset turnover
none - ANSWER-Gross margin ratio
Conservatism - ANSWER-given an uncertain and imprecise environment, it is better to
understate than overstate economic well-being
The ratio that shows how investors value the stock is
payout ratio
earnings per share
return on equity
,return on assets
none - ANSWER-None
Understandability - ANSWER-Financial conditions and results should be
communicated so that they are understandable by an educated user of financial
information
Relevance - ANSWER-Financial data must also be relevant to a user to be of value,
extraneous information need not appear
Financial strength ratios are utilized to help predict the long-run solvency of a company.
T/F - ANSWER-True
Ratio analysis is popular because ratios:
summarize important info
are useful in comparisons within a company over time
are useful in comparisons with other companies
all the above - ANSWER-All the above
Consistency - ANSWER-accounting entities must consistently apply the elections
available to them so that results from different periods can be compared
ROE shows how much income was earned for every dollar invested by owners. T/F -
ANSWER-True
Materiality - ANSWER-there is a cost/benefit aspect to financial reporting; insignificant
data need not be reported if it would not affect a user's decision making
, A company's annual report is used primarily by the taxing authorities. T/F - ANSWER-
True
Managerial accounting is involved in:
external reports
internal reports
tax reports
economic reports - ANSWER-Internal reports
Using an accelerated depreciation method for tax purposes would be an example of:
managerial accounting
financial accounting
tax accounting
none - ANSWER-Tax accounting
Owners in corporations are liable only for the amount they have invested and no more.
T/F - ANSWER-True
Information that can make a difference to the decision at hand is considered to be:
reliable
comparable
conservatism
understandability
none - ANSWER-None - relevancy
In a proprietorship:
actual QueStionS and veriFied anSwerS (lateSt
update) a+ grade 100% guarantee veriFied By expertS
From a bankers perspective, the most important ratio on the customers financial
statement is - ANSWER-Current Ratio
Economic Entity - ANSWER-one firm, one set of books
Which of the following is an operating performance ratio?
Debt to total assets
Times interest earned
Payout ratio
Times interest earned and payout ratio
None - ANSWER-Times interest earned and Payout Ratio
Going Concern - ANSWER-a firm has value beyond the liquidation value of its assets
Horizontal analysis compares the components of a balance sheet with a base item. T/F -
ANSWER-False
Monetary Unit - ANSWER-financial transactions are denominated in a stable unit of
measure
Since companies have different numbers of shares outstanding, it is not useful to
compare earnings per share ratios. T/F - ANSWER-True
Accounting Periods - ANSWER-the result of operations for an entity must be reported
on a periodic basis, usually a year
,There are two ratios that help define the operating cycle. They are:
receivables and inventory turnover
receivables and accounts payable
inventory and accounts payable turnover
none of these - ANSWER-Receivables and accounts payable
Revenue/Epense matching - ANSWER-accounting entities should aspire to recognize
expenses in the same accounting periods as the revenues they generate
The ratio that shows the markup in price over the cost of goods sold is
profit margins
gross margin ratio
return on assets
asset turnover
none - ANSWER-Gross margin ratio
Conservatism - ANSWER-given an uncertain and imprecise environment, it is better to
understate than overstate economic well-being
The ratio that shows how investors value the stock is
payout ratio
earnings per share
return on equity
,return on assets
none - ANSWER-None
Understandability - ANSWER-Financial conditions and results should be
communicated so that they are understandable by an educated user of financial
information
Relevance - ANSWER-Financial data must also be relevant to a user to be of value,
extraneous information need not appear
Financial strength ratios are utilized to help predict the long-run solvency of a company.
T/F - ANSWER-True
Ratio analysis is popular because ratios:
summarize important info
are useful in comparisons within a company over time
are useful in comparisons with other companies
all the above - ANSWER-All the above
Consistency - ANSWER-accounting entities must consistently apply the elections
available to them so that results from different periods can be compared
ROE shows how much income was earned for every dollar invested by owners. T/F -
ANSWER-True
Materiality - ANSWER-there is a cost/benefit aspect to financial reporting; insignificant
data need not be reported if it would not affect a user's decision making
, A company's annual report is used primarily by the taxing authorities. T/F - ANSWER-
True
Managerial accounting is involved in:
external reports
internal reports
tax reports
economic reports - ANSWER-Internal reports
Using an accelerated depreciation method for tax purposes would be an example of:
managerial accounting
financial accounting
tax accounting
none - ANSWER-Tax accounting
Owners in corporations are liable only for the amount they have invested and no more.
T/F - ANSWER-True
Information that can make a difference to the decision at hand is considered to be:
reliable
comparable
conservatism
understandability
none - ANSWER-None - relevancy
In a proprietorship:
