Questions from Financial Accounting

Q: Ramesh Company has prepared draft financial results now being reviewed by the

Ramesh Company has prepared draft financial results now being reviewed by the accountants. You notice that the financial leverage percentage is negative. You also note that the current ratio is 2.4 an...

Q: Youngstown Corporation is considering changing its inventory method from FIFO to LIFO

Youngstown Corporation is considering changing its inventory method from FIFO to LIFO and wants to determine the impact on selected accounting ratios. In general, what impact would you expect on the f...

Q: A large retailer reported revenue of $1,665,000

A large retailer reported revenue of $1,665,000. The company’s gross profit percentage was 44 percent. What amount of cost of goods sold did the company report?

Q: If a potential investor is analyzing three companies in the same industry

If a potential investor is analyzing three companies in the same industry and wishes to invest in onlyone, which ratio is least likely to affect the investor’s decision? a. Quick ratio. b. Earnings p...

Q: A company has quick assets of $300,000 and current

A company has quick assets of $300,000 and current liabilities of $150,000. The company purchased $50,000 in inventory on credit. After the purchase, the quick ratio would be a. 2.0 b. 2.3 c. 1.5 d....

Q: The average days’ supply in inventory for Natural Foods Stores is 14

The average days’ supply in inventory for Natural Foods Stores is 14.6 days. The company reportedcost of goods sold in the amount of $1,500,000 and total sales of $2,500,000. What is the averageamount...

Q: Given the following ratios for four companies, which company is least

Given the following ratios for four companies, which company is least likely to experience problems paying its current liabilities promptly?

Q: A decrease in selling and administrative expenses would impact what ratio?

A decrease in selling and administrative expenses would impact what ratio? a. Fixed asset turnover ratio. b. Times interest earned ratio. c. Debt-to-equity ratio. d. Current ratio.

Q: A creditor is least likely to use what ratio when analyzing a

A creditor is least likely to use what ratio when analyzing a company that has borrowed funds on a long-term basis? a. Cash coverage ratio. b. Debt-to-equity ratio. c. Times interest earned ratio. d...

Q: On January 1, 2011, Clearwater Corporation sold a $750

On January 1, 2011, Clearwater Corporation sold a $750,000, 8 percent bond issue (9 percent market rate). The bonds were dated January 1, 2011, pay interest each December 31, and mature in 10 years....