Chp #4 Self Study Questions

b. a service company does not include a line of cost of goods sold

A merchandising company's multi-step income statement differs from that of a service company in what way? a. there is no difference b. a service company does not include a line of cost of goods sold c. a service company has a line for selling expenses whereas a merchandising company does not d. a merchandising company will have a line for income from operations whereas a service company will not

b. 10%

a company reported net income of $200 on net sales of $2,000. The company's return on sales is: a. $1,800 b. 10% c. 0.1% d. none of the above

c. total assets must equal total liabilities plus stockholders equity

for the balance sheet to be in balance, then the following must exist: a. total assets must be greater than total liabilities b. total assets must be less than total liabilities c. total assets must equal total liabilities plus stockholders equity d. total liabilities must equal total stockholders equity

d. division

ratio analysis always involves which type of arithmetic operation? a. addition b. subtraction c. multiplication d. division

c. a measure of a company's cash flow flexibility

the return on sales ratio does not provide insight on which of the following: a. a company's net income per dollar of sales b. a measure of a company's financial performance c. a measure of a company's cash flow flexibility d. a measure of a company's operating efficiency

d. benchmarking analysis involves comparing a company's ratios over time

which of the following is not a true statement? a. benchmarking analysis involves comparing a company to its industries average b. benchmarking analysis involves comparing a company to its competitors c. trend analysis involves comparing a company's rations over time d. benchmarking analysis involves comparing a company's ratios over time

d. total liabilities

which of the following is not shown on the statement of stockholder's equity? a. contributed capital b. retained earnings c. common stock d. total liabilities

b. net income

which of the following items will not be reported on a classified balance sheet? a. current assets b. net income c. total liabilities d. common stock

d. patents

which of the following would be considered an intangible asset? a. cash b. land c. accounts payable d. patents

b. notes payable

which of the following would most likely be classified as a long-term liability? a. accounts payable b. notes payable c. accounts receivable d. cash

c. property, plant, equipment

which of the following would not be considered a current asset? a. inventory b. accounts receivable c. property, plan, equipment d. cash