University of Central Florida

Horizontal analysis - Answer (New - old)/old = answer as a percent change • Positive answer implies an increase • Negative answer implies a decrease Vertical analysis for income statements - Answer Item given/ net sales • Final answer is expressed as a percent Vertical analysis for balance sheets - Answer For assets: Item given (x) / total assets For liabilities or stockholders equity: Item given (x) / total liabilities + total stockholders equity • ...

Prepaid Expenses - Answer Expenses that have been paid in the current fiscal period but will not be subtracted from revenue until a subsequent fiscal period How would you write a $12,000 prepaid insurance expense for the year (12 months)? How would you adjust it after a month? - Answer (DB)Prepaid Insurance 12,000 (CR)Cash 12,000 (DB)Insurance Expense 1,000 (CR)Prepaid Insurance 1,000 What are the 4 methods of Inventory Costing? - Answer Specific Identificatio...

10-K - Answer annual audited financial statements An unqualified auditors' opinion about an entity's financial statements: - Answer states that they are presented in conformance with U.S. generally accepted accounting principles. consolidated - Answer means the company owns other companies Conservatism - Answer make estimates lower to make firm look worse off and not mislead investors Matching Principle - Answer match expenses to revenues in the sa...

Your company has the following information: Earnings before Taxes (from the financial statements: $1,000,000 Tax Liability (from the tax return): $80,000 Increase in deferred tax liabilities for the year: $25,000 Statutory tax rate (not the effective rate): 21% Which is the correct tax expense on the financial statements? - Answer 80,000 + 25,000= 105,000 Your company has the following information: "adjusted" taxable income: $5,000,000 Interest expense: 1,950,000 Busine...

If the ending inventory of a firm is overstated by $51,000, by how much and in what direction (overstated or understated) will the firm's operating income be misstated? - Answer Operating income will be overstated by 51000 leverage can be defined as the use of ________ or fixed _______ to maximize returns. - Answer debt or fixed costs It's important to note that an advantage of using debt rather than stock to raise capital is: - Answer that interest (paid on debt) i...

If you were interested in evaluating the profitability of a company and could have only limited historical data, would you prefer to know operating income or net income for the past five years? - Answer operating income Which series of data is more meaningful? operating income OR net income - Answer Operating income Assets = - Answer Liabilities + PIC + RE Ending RE = - Answer Beginning RE + NI - Div What accounts for the difference between issued shares an...

Margin of Safety = - Answer Current Sales - BreakEven Sales The independent auditors' report usually: - Answer includes an opinion that the financial statements present fairly, in all material respects, financial information about the company. Units (for sale) = - Answer (Fixed Expenses + Operating Income) / CM Current Sales = - Answer BreakEven Dollars + Margin of Safety or Units * Price per unit Margin of Safety Ratio = - Answer Margin of Safe...

ROA = - Answer NI / Average Total Assets ROE = - Answer NI / Average SE Working Capital = - Answer CA - CL Current Ratio = - Answer CA / CL Quick Ratio = - Answer (Cash + A/R) / CL Cash Ratio = - Answer Cash / CL Debt-to-Equity = - Answer Total Debt / Total Equity Debt Ratio = - Answer Total Debt / Total Assets Ending SE = - Answer Beg SE +NI -Dividends Income Statement - Answer Sales -COGS =Gross Profit ...

The equity of Lime Company is $180,000 and the total liabilities are $80,000. The total assets are ________. - Answer Assets = Liabilities + Equity = 180,000 + 80,000 = 260,000 Grapefruit Services started the year with total assets of $90,000 and total liabilities of $40,000. The company is a sole proprietorship. The revenues and the expenses for the year amounted to $130,000 and $50,000, respectively. During the year, there were no new capital contributions and the owner with...

Liability - Answer A present responsibility to sacrifice assets in the future due to a transaction or other event that happened in the past Normal Balance: credit Financial statement: balance sheet Current liability - Answer Liability payable within one year Normal Balance: Credit Financial statement is : Balance sheet It's a current liability Long-Term liability - Answer Liability payable after ONE year Normal balance: Credit Financial statement: Balance sh...