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Match the following terms with their definitions. -Horizontal analysis


A) Uses a base year
B) Inventory and prepaid expenses are subtracted
C) A liability
D) Net sales ÷ total assets
E) Actual sale after returns on discounts
F) Current assets ÷ current liabilities
G) What we owe creditors
H) Data placed side by side
I) Cash, supplies
J) Obligations due within one year
K) Cost of goods for resale
L) Obligations that are not due for at least one year
M) Total this period is compared by amount of percent to same total last period
N) Part of stockholders' equity
O) What customers owe
P) Dollars not shown
Q) Paid in advance
R) Profit
S) Revenues and expense for a specific period of time
T) Prepared as of a particular date
U) Beginning inventory plus new purchases - ending inventory
V) True cost of purchases
W) Includes no plant and equipment assets
X) Sales - cost of goods sold
Y) Each liability and equity is analyzed as a percent of the total

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A current ratio is calculated by current assets times current liabilities.

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Cost of merchandise sold equals beginning inventory:


A) Plus net purchases plus ending inventory
B) Plus net purchases minus ending inventory
C) Minus net purchases minus ending inventory
D) Minus net purchases plus ending inventory
E) None of these

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Which one is not used to calculate net sales?


A) Purchases
B) Sales discount
C) Sales returns and allowance
D) Gross sales
E) None of these

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Reductions in the selling price for early payment are called sales returns and allowances.

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Complete the following vertical analysis. With cash of $15,750, accounts receivables of $10,800, inventory of $97,000, and PPD expenses of $11,000, what percent of total assets are accounts receivables?

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$15,750 + $10,800 + ...

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Match the following terms with their definitions. -Liabilities


A) Uses a base year
B) Inventory and prepaid expenses are subtracted
C) A liability
D) Net sales ÷ total assets
E) Actual sale after returns on discounts
F) Current assets ÷ current liabilities
G) What we owe creditors
H) Data placed side by side
I) Cash, supplies
J) Obligations due within one year
K) Cost of goods for resale
L) Obligations that are not due for at least one year
M) Total this period is compared by amount of percent to same total last period
N) Part of stockholders' equity
O) What customers owe
P) Dollars not shown
Q) Paid in advance
R) Profit
S) Revenues and expense for a specific period of time
T) Prepared as of a particular date
U) Beginning inventory plus new purchases - ending inventory
V) True cost of purchases
W) Includes no plant and equipment assets
X) Sales - cost of goods sold
Y) Each liability and equity is analyzed as a percent of the total

Correct Answer

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Income statements are prepared only once a year.

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Match the following terms with their definitions. -Current ratio


A) Uses a base year
B) Inventory and prepaid expenses are subtracted
C) A liability
D) Net sales ÷ total assets
E) Actual sale after returns on discounts
F) Current assets ÷ current liabilities
G) What we owe creditors
H) Data placed side by side
I) Cash, supplies
J) Obligations due within one year
K) Cost of goods for resale
L) Obligations that are not due for at least one year
M) Total this period is compared by amount of percent to same total last period
N) Part of stockholders' equity
O) What customers owe
P) Dollars not shown
Q) Paid in advance
R) Profit
S) Revenues and expense for a specific period of time
T) Prepared as of a particular date
U) Beginning inventory plus new purchases - ending inventory
V) True cost of purchases
W) Includes no plant and equipment assets
X) Sales - cost of goods sold
Y) Each liability and equity is analyzed as a percent of the total

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The asset turnover from the following is (round to nearest tenth) :  Gross sales $70,000 Sales discount $2,500 Sales returns and allowances $8,000 Total assets $39,000\begin{array} { | l | r | } \hline \text { Gross sales } & \$ 70,000 \\\hline \text { Sales discount } & \$ 2,500 \\\hline \text { Sales returns and allowances } & \$ 8,000 \\\hline \text { Total assets } & \$ 39,000 \\\hline\end{array}


A) 1.7
B) 1.5
C) 1.9
D) 1.6
E) None of these

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Jay Corporation has earned $175,900 after tax. The accountant calculated the return on equity as 12.5%. Jay Corporation's stockholders' equity to the nearest dollar is:


A) $140,720
B) $14,720
C) $1,407,200
D) $140,720,000
E) None of these

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Given the following for a company: sales $48,000, sales returns and allowances $6,000, operating expenses $6,200, beginning inventory $900, net purchases $9,100, ending inventory $2,300, find the company's gross profit.


A) $34,000
B) $43,000
C) $34,003
D) $34,300
E) None of these

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Net purchases are the cost of purchases minus purchase discounts minus purchase returns and allowances.

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Net income is equal to gross profit minus operating expenses.

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Match the following terms with their definitions. -Balance sheet


A) Uses a base year
B) Inventory and prepaid expenses are subtracted
C) A liability
D) Net sales ÷ total assets
E) Actual sale after returns on discounts
F) Current assets ÷ current liabilities
G) What we owe creditors
H) Data placed side by side
I) Cash, supplies
J) Obligations due within one year
K) Cost of goods for resale
L) Obligations that are not due for at least one year
M) Total this period is compared by amount of percent to same total last period
N) Part of stockholders' equity
O) What customers owe
P) Dollars not shown
Q) Paid in advance
R) Profit
S) Revenues and expense for a specific period of time
T) Prepared as of a particular date
U) Beginning inventory plus new purchases - ending inventory
V) True cost of purchases
W) Includes no plant and equipment assets
X) Sales - cost of goods sold
Y) Each liability and equity is analyzed as a percent of the total

Correct Answer

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Calculate (A)net sales, (B)gross profit (C)total operating expenses, and (D)net income. Sales returns $600, rent expense $1,700, sales discounts $1,800, depreciation expense $490, cost of merchandise sold $7,200, gross sales $19,900, advertising expense $650, salary expense $2,500, heat expense $850.

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A. 19,900 - 600 - 1,800 = 17,5...

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Complete a trend analysis for sales (round to nearest whole percent and use 2014 as the base year). 2017201620152014 Sales $620,000$580,000$450,000$600,000(D)(C)(B)(A)\begin{array} { | c | c | c | c | c | } \hline & 2017 & 2016 & 2015 & 2014 \\\hline \text { Sales } & \$ 620,000 & \$ 580,000 & \$ 450,000 & \$ 600,000 \\\hline & ( \mathrm { D } ) & ( \mathrm { C } ) & ( \mathrm { B } ) & ( \mathrm { A } ) \\\hline\end{array}

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A. 100%; B...

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From the following, prepare a balance sheet for Roe Co. as of December 31, 2017.  Salaries Payable 6,000 Accounts Receivable 9,000 Retained Earnings 21,000 Common Stock 27,000 Mortgage Note Payable 45,000 Prepaid Rent 12,000 Accounts Payable 19,000 Land 18,000 Cash 3,000 Merchandise Inventory 16,000 Building 60,000\begin{array} { | l | l | } \hline \text { Salaries Payable } & 6,000 \\\hline \text { Accounts Receivable } & 9,000 \\\hline \text { Retained Earnings } & 21,000 \\\hline \text { Common Stock } & 27,000 \\\hline \text { Mortgage Note Payable } & 45,000 \\\hline \text { Prepaid Rent } & 12,000 \\\hline \text { Accounts Payable } & 19,000 \\\hline \text { Land } & 18,000 \\\hline \text { Cash } & 3,000 \\\hline \text { Merchandise Inventory } & 16,000 \\\hline \text { Building } & 60,000 \\\hline\end{array}

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None...

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Given the following for a company: sales $80,000, beginning inventory $5,000, purchases $21,800, purchase discounts $790, ending inventory $5,100, find the company's cost of merchandise sold.


A) $21,560
B) $20,190
C) $20,910
D) $21,650
E) None of these

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Assets represent things of value owed by the business.

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