Question 1

Net sales were $115,000 in Year 1 and $65,000 in Year 2. The percentage increase or decrease in net sales was: (Round your answer to two decimal places, X.XX%.)
A) (56.52%).
B) 56.52%.
C) (43.48%).
D) 43.48%.

Accepted Answer

The decrease in net sales from Year 1 to Year 2 is $115,000 - $65,000 = $50,000. The percentage decrease is ($50,000 / $115,000) * 100 = 43.48%.

Question 2

Amounts of items compared on the same line of comparative financial reports describes:
A) vertical analysis.
B) ratio analysis.
C) horizontal analysis.
D) size analysis.

Accepted Answer

Horizontal analysis compares financial data across multiple periods, allowing for the assessment of trends over time. This involves looking at the amounts of items on financial reports from one period to the next, rather than comparing items within the same financial period (which would be vertical analysis) or using ratios to assess financial health (ratio analysis). Size analysis is not a commonly used term in financial reporting.

Question 3

The sales of Mary's Services for Years 1, 2, and 3 are $25,000, $52,000, $64,000 respectively. The trend percentage for Year 2 is:
A) 39.06%.
B) 256.00%.
C) 208.00%.
D) 60.16%.

Accepted Answer

The trend percentage is calculated by taking the year of interest (Year 2 in this case), dividing its sales by the base year's sales (Year 1), and then multiplying by 100. For Year 2, the calculation is ($52,000 / $25,000) * 100 = 208.00%.

Question 4

To find the percent of increase or decrease of an item in a comparative balance sheet you use the formula: % change = amount of change/base (old year).

Accepted Answer

The formula "% change = amount of change/base (old year)" correctly calculates the percentage of increase or decrease by comparing the old value to the change, providing insight into the relative change over time.

Question 5

In a comparative balance sheet, the ending Accounts Receivable for 2019 was $189,000 and is $301,000 for 2020. The net increase or decrease from 2019 to 2020 is: (Round your answer to two decimal places, X.XX%.)
A) (59.26%).
B) 59.26%.
C) 37.21%.
D) (37.21%).

Accepted Answer

The net increase from 2019 to 2020 is calculated as: [(301,000 - 189,000) / 189,000] * 100 = 59.26%. This represents a 59.26% increase.

Question 6

The Cost of Goods Sold for Years 1, 2, and 3 are $23,000, $48,000, $69,000, respectively. The trend percentage for Year 3 is:
A) (300%).
B) 300%.
C) 208.70%.
D) (208.70%).

Accepted Answer

The trend percentage for Year 3 is calculated by taking the Year 3 value, dividing it by the Year 1 value, and then multiplying by 100. So, ($69,000 / $23,000) * 100 = 300%.

Question 7

Which analysis compares line items on an income statement with those from the prior year?
A) Horizontal analysis
B) Vertical analysis
C) Statement analysis
D) None of the above are true.

Accepted Answer

Horizontal analysis compares financial data across different periods, such as comparing line items on an income statement from one year to those of the previous year, to identify trends and changes over time.

Question 8

Net income was $65,000 in Year 1 and $50,000 in Year 2. The percentage increase or decrease in net income was:
A) 30.00%.
B) 76.92%.
C) -23.08%.
D) -30.00%.

Accepted Answer

The net income decreased from $65,000 in Year 1 to $50,000 in Year 2. The decrease is $15,000. The percentage decrease is calculated as ($15,000 / $65,000) * 100 = 23.08%. Since it is a decrease, the correct answer is -23.08%.

Question 9

In a comparative balance sheet, the ending Cash for 2019 was $345,000 and is $333,000 for 2020. The net increase or decrease from 2019 to 2020 is: (Round the final answer to two decimal places.)
A) 96.52%.
B) 3.48%.
C) 3.60%.
D) -3.48%.

Accepted Answer

The decrease in cash from 2019 to 2020 is $345,000 - $333,000 = $12,000. To find the percentage decrease: ($12,000 / $345,000) * 100 = 3.48%. Since it's a decrease, the correct answer is -3.48%.

Question 10

Which analysis deals with comparing items in a financial report by expressing each item as a percentage of a certain base total?
A) Vertical analysis
B) Ratio analysis
C) Trend analysis
D) Common-size statement

Accepted Answer

The answer of Which analysis deals with comparing items in...

Question 11

If Cash is $2,100 in 20X2 and $4,000 in 20X1, what is the percent of increase or (decrease) from 20X1 to 20X2?
A) -90%
B) 90%
C) 48%
D) -47%

Accepted Answer

The decrease from $4,000 in 20X1 to $2,100 in 20X2 is calculated as: [(2,100 - 4,000) / 4,000] * 100 = (-1,900 / 4,000) * 100 = -47.5%, which rounds to -47%.

Question 12

From the following balance sheet for Bricks Corporation, compute the common-size balance sheet amounts. (Round all percentages to nearest tenth of a percent.)

Accepted Answer

The answer of From the following balance sheet for Bricks...

Question 13

When doing a vertical analysis, which of the following is a typical comparison item set at 100%?
A) Total liabilities
B) Total stockholders' equity
C) Total cash
D) Total assets

Accepted Answer

In a vertical analysis of a balance sheet, total assets are typically set at 100%. This allows for the comparison of each individual asset, liability, and equity item as a percentage of total assets, facilitating an understanding of the relative size and importance of each item in the context of the overall financial position of the company.

Question 14

What was the percentage of decrease in the Accounts Receivable account if the receivables were $87,000 in Year 1, and $67,000 in Year 2? (Round your answer two decimal places, X.XX%.)
A) -22.99%
B) 29.85%
C) -29.85%
D) 22.99%

Accepted Answer

The percentage decrease is calculated as ((87,000 - 67,000) / 87,000) * 100 = 22.99%.

Question 15

In a comparative balance sheet, the Accounts Payable balance for 2019 was $189,330 and total liabilities and equity was $459,265. What is the vertical analysis for Accounts Payable? (Round your answer to two decimal places, X.XX%.)
A) 41.22%
B) (41.22%)
C) 58.78%
D) (58.78%)

Accepted Answer

41.22%Vertical analysis is performed by expressing each item in the financial statements as a percentage of a base amount. In this case, the base amount is the total liabilities and equity for 2019, which is $459,265. The Accounts Payable balance is $189,330. To find the vertical analysis percentage for Accounts Payable, divide $189,330 by $459,265 and multiply by 100. This calculation results in approximately 41.22%.

Question 16

In a common-size income statement, advertising expenses are 10%. This means that they are 10% of:
A) net income.
B) net sales.
C) gross profit.
D) net profit.

Accepted Answer

In a common-size income statement, all line items are expressed as a percentage of net sales, making advertising expenses 10% of net sales.

Question 17

For vertical analysis purposes, the base item on an income statement is:
A) net income.
B) net sales.
C) total expenses.
D) total sales.

Accepted Answer

For vertical analysis of an income statement, the base item is typically net sales (or total sales), against which all other items are compared as a percentage. This helps in understanding the relative size of each item in relation to net sales, providing insights into the cost structure and profitability of the business.

Question 18

Complete the horizontal analysis of Soopy's Used Cars. (Round all percentages to the nearest tenth of a percent.)

Accepted Answer

The answer of Complete the horizontal analysis of Soopy's Used...

Question 19

Comparative reports in which each item is expressed as a percentage of a base amount without dollar amounts are called:
A) comparative financial statements.
B) common-size statements.
C) cash flow analysis.
D) horizontal analysis.

Accepted Answer

Common-size statements express each item as a percentage of a base amount, facilitating comparison across periods or companies by removing the effect of size differences.

Question 20

If total assets are $14,000, what is the vertical analysis for Cash when it has a balance of $8,000? (Round your answer two decimal places, X.XX%.)
A) 42.86%
B) 57.14%
C) 233.33%
D) 27.27%

Accepted Answer

57.14%Vertical analysis of an item like Cash in the context of total assets involves calculating the percentage that the item represents of the total assets. This is done by dividing the item's value by the total assets and then multiplying by 100. For Cash with a balance of $8,000 and total assets of $14,000, the calculation is ($8,000 / $14,000) * 100 = 57.14%.

Quiz 22: Analyzing Financial Statements

Net sales were $115,000 in Year 1 and $65,000 in Year 2. The percentage increase or decrease in net sales was: (Round your answer to two decimal places, X.XX%.)

Amounts of items compared on the same line of comparative financial reports describes:

The sales of Mary's Services for Years 1, 2, and 3 are $25,000, $52,000, $64,000 respectively. The trend percentage for Year 2 is:

To find the percent of increase or decrease of an item in a comparative balance sheet you use the formula: % change = amount of change/base (old year).

In a comparative balance sheet, the ending Accounts Receivable for 2019 was $189,000 and is $301,000 for 2020. The net increase or decrease from 2019 to 2020 is: (Round your answer to two decimal places, X.XX%.)

The Cost of Goods Sold for Years 1, 2, and 3 are $23,000, $48,000, $69,000, respectively. The trend percentage for Year 3 is:

Which analysis compares line items on an income statement with those from the prior year?

Net income was $65,000 in Year 1 and $50,000 in Year 2. The percentage increase or decrease in net income was:

In a comparative balance sheet, the ending Cash for 2019 was $345,000 and is $333,000 for 2020. The net increase or decrease from 2019 to 2020 is: (Round the final answer to two decimal places.)

Which analysis deals with comparing items in a financial report by expressing each item as a percentage of a certain base total?

If Cash is $2,100 in 20X2 and $4,000 in 20X1, what is the percent of increase or (decrease) from 20X1 to 20X2?

From the following balance sheet for Bricks Corporation, compute the common-size balance sheet amounts. (Round all percentages to nearest tenth of a percent.)

When doing a vertical analysis, which of the following is a typical comparison item set at 100%?

What was the percentage of decrease in the Accounts Receivable account if the receivables were $87,000 in Year 1, and $67,000 in Year 2? (Round your answer two decimal places, X.XX%.)

In a comparative balance sheet, the Accounts Payable balance for 2019 was $189,330 and total liabilities and equity was $459,265. What is the vertical analysis for Accounts Payable? (Round your answer to two decimal places, X.XX%.)

In a common-size income statement, advertising expenses are 10%. This means that they are 10% of:

For vertical analysis purposes, the base item on an income statement is:

Complete the horizontal analysis of Soopy's Used Cars. (Round all percentages to the nearest tenth of a percent.)

Comparative reports in which each item is expressed as a percentage of a base amount without dollar amounts are called:

If total assets are $14,000, what is the vertical analysis for Cash when it has a balance of $8,000? (Round your answer two decimal places, X.XX%.)