Question 1

Compare and contrast different types of financial ratios.

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Question 2

Compare and contrast quick ratio and current ratio.Which one do you think is more accurate?

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Question 3

Describe double-entry bookkeeping and the matching principle.

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Question 4

Select a manufacturing industry of your choice.Conduct a ratio analysis of three major firms in the industry to determine and compare the activity ratios in the industry.Analyze the results that you have calculated.

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Question 5

Compare and contrast public accountants and private accountants.

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Question 6

Which of the following is a leverage ratio?
A) inventory turnover ratio
B) debt-to-equity ratio
C) current ratio
D) acid-test ratio
E) accounts receivable turnover ratio

Accepted Answer

B) A company's ability to pay its long-term debts is reflected in its leverage ratios. Debt-to-equity ratio is a leverage ratio.

Question 7

Compare and contrast management accounting with financial accounting.

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Question 8

Compare and contrast accrual basis accounting and cash basis accounting.

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Question 9

Analyze the major postulates of the international financial reporting standards and conduct a class discussion on its relevance.

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Question 10

Describe the major provisions of the Sarbanes-Oxley Act.

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Question 11

Leverage ratios indicate ________.
A) how well a company is making use of its assets
B) a firm's ability to pay its short-term debts
C) how well a company is making use of its investments
D) a firm's ability to pay its long-term obligations
E) a firm's ability to meet short-term obligations

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D) A company's ability to pay its long-term debts is reflected in its leverage ratios, also known as debt ratios.

Question 12

What is GAAP?

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Question 13

A reduction in a manufacturer's inventory turnover ratio is likely to indicate that the ________.
A) market growth has been very high
B) sales are slowing down
C) forecasting has been accurate
D) company is in a strong financial position
E) company has long-term debt obligations

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B) A decline in a manufacturer's inventory turnover ratio would indicate that sales are slowing down, or it could mean sales are steady but the company made some forecasting errors and as a result produced more goods than it needed.

Question 14

Explain the significance of the income statement of a business.

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Question 15

Describe cost of goods sold and operating expenses.

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Question 16

Explain how private accountants function.

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Question 17

Obtain the financial statements of a public company of your choice.Conduct a ratio analysis to determine the leverage ratios of the company.Comment on the company's growth potential and risk based on your analysis.

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Question 18

Briefly explain trend analysis.

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Question 19

What is a balance sheet? Why is it called a balance sheet?

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Question 20

Total liabilities divided by total assets will yield the ________ ratio.
A) debt-to-equity ratio
B) current ratio
C) acid-test ratio
D) asset turnover ratio
E) debt-to-assets ratio

Accepted Answer

E) Debt-to-assets ratio is a measure of a firm's ability to carry long-term debt, calculated by dividing total liabilities by total assets.

Quiz 17: Financial Information and Accounting Concepts