Finance Questions

The debt-to-equity ratio measures which of the following?A) Profitability.B) Market strength.C) Liquidity.D) Leverage.

Direct costs:A) can be easily traced to a particular cost object.B) are incurred to benefit a particular accounting period.C) are the variable costs of producing a product.D) are incurred due to a specific decision.

Which of the following statements is true regarding stockholders?A) They are creditors of the company.B) They are owners of the company.C) They expect to receive interest on their investment.D) They expect to receive their investment back at a specified point in time.

Which of the following transactions will increase a current ratio, which is currently 2.5?A) Using cash to pay an account payable.B) Collecting an account receivable.C) Receiving cash from signing a 6-month note payable.D) Accruing (Recording, Increasing) an expense.

Dividends are:A) payments made to both creditors and stockholders.B) required to be paid to creditors.C) voluntary payments made by the company to creditors.D) payments made to stockholders.

Which of the following statements is false?A) Time-series analysis examines a company's performance over time.B) The North American Industry Classification System assigns industry codes based on business operations.C) When computing the component percentages for a common size analysis of the income statement, net income is the base figure.D) It is often useful to compare a company's performance with that of a competitor.

Manufacturing overhead includes:A) all manufacturing costs except direct labor.B) all selling and administrative costs.C) all direct material, direct labor and administrative costs.D) all manufacturing costs except direct labor and direct materials.

A $3.00 increase in a product's variable expense per unit accompanied by a $3.00 increase in its selling price per unit will:A) have no effect on the break-even volume.B) have no effect on the contribution margin ratio.C) none of these answers are correct.D) decrease the contribution margin.

The usual starting point for a master budget is:A) the budgeted income statement.B) the production budget.C) the sales forecast or sales budget.D) the direct materials purchase budget.

Which of the following is true regarding the SEC?A) It was established in 1934.B) It comes under the control of the FASB.C) Its rules and regulations apply to all companies, both public and private.D) It was enacted as a result of Sarbanes-Oxley.E) It is responsible for preparing the financial statements of all publicly-held companies.

Which of the following costs are always irrelevant in decision making?A) sunk costsB) fixed costsC) avoidable costsD) opportunity costs

Roosevelt Inc. breaks even when it sells 1,600 units. The company's variable cost per unit is $10 and the selling price is $25 per unit. The total fixed cost are $24,000 & the contribution margin is $24,000. How many units does Roosevelt need to sell to earn $40,000 in net income?A) 4,267B) 1,760C) 3,600D) 3,200

Which of the following correctly describes the various financial statements?A) The balance sheet is a financial statement that covers a period of time.B) The statement of stockholders' equity is a financial statement at a specific point in time.C) The cash flow statement is a financial statement at a specific point in time.D) An income statement covers a period of time.

Seitz Trucking's retained earnings increased $20,000 during the current year. What was Seitz Trucking's current year net income or loss given that Seitz Trucking declared $25,000 of dividends during this year?A) Net loss was $5,000.B) Net loss was $45,000.C) Net income was $45,000.D) Net income was $5,000.

Calvin Corp., a merchandising company, reported the following results for November:Sales $4,096,400 Cost of goods sold (all variable) $2,194,500 Total variable selling expense $238,700 Total fixed selling expense $144,700 Total variable administrative expense $238,700 Total fixed administrative expense $282,900The contribution margin for November is:A) $1,424,500B) $1,901,900C) $996,900D) $3,191,400

Recognizing an expense may be accompanied by which of the following?A) An increase in assetsB) A decrease in revenueC) A decrease in assetsD) A decrease in liabilities

Which of the following is true?A) Variable costs per unit will vary depending on the level of production.B) Fixed costs per unit always stay the same.C) Total fixed costs plus total variable costs will always equal total sales.D) The contribution margin will always equal fixed costs plus net income.

The salary paid to the president of a company would best be classified on the income statement as a(n):A) direct labor cost.B) product cost.C) period cost.D) manufacturing overhead cost.

Hoosier Company experienced an accounting event that affected its financial statements as indicated below.- Increase in Assets &- Increase in Equity &- Increase in Financing Cash FlowsWhich of the following accounting events could have caused these effects on the elements of Hoosier's financial statements?A) Borrowed money from a bankB) Earned cash revenueC) Paid a cash dividendD) Issued common stock

For accounting information to be useful, it must be which of the following?A) It must be comparable and reliable.B) It must be consistent and comparable.C) It must be a faithful representation and relevant.D) It must be relevant and consistent.