Test Bank Financial Accounting IFRS Edition 3rd Edition By Earl Stice, James Stice, Steve Albrecht, Monte Swain, Rong-Ruey Duh, Audrey Wenhsin Hsu

Test Bank For
Financial Accounting IFRS
Edition 3rd Edition By Earl Stice,
James Stice, Steve Albrecht,
Monte Swain, Rong-Ruey Duh,
Audrey Wenhsin Hsu
(All Chapters 1-15, 100%
Original Verified, A+ Grade)
All Chapters Arranged Reverse:
15-1
This is The Original Test Bank
For 3rd Edition, All other Files in
The Market are
Fake/Old/Wrong Edition.

,
,Chapter 15—Analyzing Financial Statements


MULTIPLE CHOICE

1. Which of the following statements best describes financial statement analysis?
a. Financial statement analysis involves relationships and trends.
b. Financial statement analysis evaluates future performance.
c. Measurements for a specific company should be compared only with the past.
d. All of these are correct.
ANS: A PTS: 1 DIF: Easy OBJ: 15.1
NAT: AACSB Reflective Thinking | AICPA FN Measurement

2. Which of the following is one of the purposes of financial statement analysis?
a. Diagnosis
b. Prognosis
c. Both diagnosis and prognosis
d. Neither diagnosis nor prognosis
ANS: C PTS: 1 DIF: Easy OBJ: 15.1
NAT: AACSB Reflective Thinking | AICPA FN Measurement

3. When analyzing financial statements, diagnosis is
a. The prediction of how a business will perform in the future
b. The identification of the trends in past numbers
c. The prediction of how many employees will lose their jobs in the coming year
d. The identification of where a business has problems
ANS: D PTS: 1 DIF: Easy OBJ: 15.1
NAT: AACSB Reflective Thinking | AICPA FN Measurement

4. When analyzing financial statements, prognosis is
a. The prediction of how a business will perform in the future
b. The identification of the trends in past numbers
c. The prediction of how many employees will lose their jobs in the coming year
d. The identification of where a business has problems
ANS: A PTS: 1 DIF: Easy OBJ: 15.1
NAT: AACSB Reflective Thinking | AICPA FN Measurement

5. Relationships between financial statement amounts are called
a. Financial statement analyses
b. Financial ratios
c. Liquidity ratios
d. DuPont ratios
ANS: B PTS: 1 DIF: Easy OBJ: 15.1
NAT: AACSB Reflective Thinking | AICPA FN Measurement




© 2021 Cengage. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the
U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

, 6. External users of financial statements use financial statement analysis for
a. Operating, investing, and financing decisions
b. Investing decisions
c. Operating and financing decisions
d. Financing decisions
ANS: B PTS: 1 DIF: Easy OBJ: 15.1
NAT: AACSB Reflective Thinking | AICPA FN Measurement

7. Management uses financial statement analysis for
a. Operating, investing, and financing decisions
b. Investing decisions
c. Operating and financing decisions
d. Financing decisions
ANS: A PTS: 1 DIF: Easy OBJ: 15.1
NAT: AACSB Reflective Thinking | AICPA FN Measurement

8. Financial statement analysis is greatly enhanced when financial ratios are compared with
a. Past values
b. Future values
c. Values for other firms in the same industry
d. Both past values and values for other firms in the same industry
ANS: D PTS: 1 DIF: Easy OBJ: 15.1
NAT: AACSB Reflective Thinking | AICPA FN Measurement

9. What ratio is used to measure a firm's liquidity?
a. Debt ratio
b. Asset turnover
c. Current ratio
d. Return on equity
ANS: C PTS: 1 DIF: Easy OBJ: 15.2
NAT: AACSB Reflective Thinking | AICPA FN Measurement

10. The ability a company has to pay its debts in the short run is its
a. Leverage
b. Liquidity
c. Efficiency
d. Profitability
ANS: B PTS: 1 DIF: Easy OBJ: 15.2
NAT: AACSB Reflective Thinking | AICPA FN Measurement

11. Which of the following ratios is used to measure a firm's leverage?
a. Debt ratio
b. Current ratio
c. Asset turnover
d. Return on equity
ANS: A PTS: 1 DIF: Easy OBJ: 15.2
NAT: AACSB Reflective Thinking | AICPA FN Measurement



© 2021 Cengage. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the
U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.