Multiple type questions on preparation of financial statements
Answers
3. Income statement format that separates cost of goods sold into categories?
STANDARD
DETAILED
EXPANDED
MULTI-STEP
4. Net income equals:
TOTAL REVENUES MINUS COST OF GOODS SOLD
TOTAL REVENUES MINUS TOTAL EXPENSES
OPERATING REVENUES MINUS OPERATING EXPENSES
REVENUES MINUS EXPENSES PLUS INCOME TAXES
5. Which is not a cash activity listed on the cash flow statememt?
OPERATING ACTIVITIES
INVESTING ACTIVITIES
PURCHASING ACTIVITIES
FINANCING ACTIVITIES
6. What financial ratio helps management evaluate profits available for dividends?
RETENTION RATE
DEBT RATIO
DEBT SERVICE COVERAGE RATIO
CASH RATIO
7. The days’ sales in inventory ratio formula uses which of the following:
CURRENT YEAR SALES
BEGINNING INVENTORY
PRIOR YEAR SALES
ENDING INVENTORY
8. Earnings per share shows investors the __________ earned per outstanding share of stock.
OPERATING INCOME
INCOME BEFORE TAXES
NET INCOME
INCOME BEFORE INTEREST AND TAXES
9. The dividend payout ratio is calculated by dividing total dividends by:
OPERATING INCOME
INCOME BEFORE TAXES
INCOME BEFORE INTEREST AND TAXES
NET INCOME
10. The profit margin ratio measures the _______________ earned from each dollar of sales.
OPERATING INCOME
NET INCOME
INCOME BEFORE TAXES
INCOME BEFORE INTEREST AND TAXES
