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25 Cards in this Set
- Front
- Back
CH 28
In a trend analysis, an index number of 139 for 20x7 sales indicates that |
sales for 20x7 were 139 percent of the sales for the same company in the base yea
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If Year 1 equals $1,400, Year 2 equals $1,554, and Year 3 equals $1,456, the index number to be assigned for Year 3 in trend analysis
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104.
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A quick ratio that is much smaller than the current ratio indicates that
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inventories represent a large portion of current assets.
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A high receivable turnover indicates that
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customers are making payments very quickly
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The ability to pay bills when due and to meet unexpected needs for cash most closely describes
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liquidity.
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One reason that a common‐size statementis a usefultool in financial performance evaluation isthatit enablesthe userto
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make better comparisons of two companies of different sizes in the same industry
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In trend analysis, each item is expressed as a percentage of the
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base year amount.
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In a common‐size income statement for a retail store, the 100 percent amount is fOR
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net revenues
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An example of horizontal analysis is
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trend analysis.
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A common measure of long‐term solvency is the
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debt to equity ratio
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CH 14
cash inflows and outflows are typically easier to manipulate than earning. |
True
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Declared and issued stock divined
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does not represent a cash flow
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sold a long term investment
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investing activities
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paid interest on note
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operating activities
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received dividend on securities held.
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operating activities
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issued common stock for cash
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financing activities
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purchased land and building with a mortage
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schedule of non-cash investing and financing activities
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sold building and equipment for cash
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investing activities actions
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depreciation on equipment
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operating activities
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when statement of cash flows is prepared using indirect method
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net income is the starting point
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the equation for finding the breakeven point may be written as
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S - VC - FC = 0.
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The breakeven point is
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where total revenue equals total costs.
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In a graph of cost‐volume‐profit analysis, the
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slope of the total cost line is dependent on the variable cost per unit.
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At production levels beyond the breakeven point,
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profit is postive
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The breakeven pointisthe point at which
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contribution margin equals fixed costs.
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