WSU ACCTG 230 EXAM STUDY GUIDE 1 2026
FULL QUESTIONS AND ANSWERS GRADED A+
◉ Net Margin. Answer: net income/net sales
◉ Asset Turnover Ratio. Answer: net sales/average total assets
◉ Return on Investment (ROI). Answer: net income/average total
assets
◉ Return on Equity (ROE). Answer: Net Income / Average Total
Stockholders' Equity
◉ Earnings per Share. Answer: Net earnings available for common
stock / Average number of outstanding common shares
◉ Price Earnings Ratio. Answer: market price per share/earnings
per share
◉ Dividend Yield. Answer: dividends per share/market price per
share
, ◉ Gross Margin. Answer: the difference between sales revenue and
cost of goods sold
◉ Cost of goods sold. Answer: Total cost incurred for the goods sold
during a specific accounting period
◉ percent of receivables method. Answer: Estimating the amount of
the allowance for doubtful accounts as a percentage of the
outstanding receivables balance. The percentage is typically based
on a combination of factors such as historical experience, economic
conditions, and the company's credit policies.
◉ tangible assets. Answer: Assets that can be touched, such as
equipment, machinery, natural resources, and land.
◉ intangible assets. Answer: Assets that may be represented by
pieces of paper or contracts that appear tangible; however, the true
value of an intangible asset lies in the rights and privileges extended
to its owners.
◉ What long-term tangible assets depreciate?. Answer: Property,
Plant, and Equipment (EXCEPT FOR LAND, LAND HAS AN INFINITE
LIFE)
FULL QUESTIONS AND ANSWERS GRADED A+
◉ Net Margin. Answer: net income/net sales
◉ Asset Turnover Ratio. Answer: net sales/average total assets
◉ Return on Investment (ROI). Answer: net income/average total
assets
◉ Return on Equity (ROE). Answer: Net Income / Average Total
Stockholders' Equity
◉ Earnings per Share. Answer: Net earnings available for common
stock / Average number of outstanding common shares
◉ Price Earnings Ratio. Answer: market price per share/earnings
per share
◉ Dividend Yield. Answer: dividends per share/market price per
share
, ◉ Gross Margin. Answer: the difference between sales revenue and
cost of goods sold
◉ Cost of goods sold. Answer: Total cost incurred for the goods sold
during a specific accounting period
◉ percent of receivables method. Answer: Estimating the amount of
the allowance for doubtful accounts as a percentage of the
outstanding receivables balance. The percentage is typically based
on a combination of factors such as historical experience, economic
conditions, and the company's credit policies.
◉ tangible assets. Answer: Assets that can be touched, such as
equipment, machinery, natural resources, and land.
◉ intangible assets. Answer: Assets that may be represented by
pieces of paper or contracts that appear tangible; however, the true
value of an intangible asset lies in the rights and privileges extended
to its owners.
◉ What long-term tangible assets depreciate?. Answer: Property,
Plant, and Equipment (EXCEPT FOR LAND, LAND HAS AN INFINITE
LIFE)
