2. The order of presentation of nontypical items that may appear on the income statement is (Points: 4) Extraordinary items, Discontinued operations, Other revenues and expenses. Discontinued operations, Extraordinary items, Other revenues and expenses. Other revenues and expenses, Discontinued operations, Extraordinary items. Other revenues and expenses, Extraordinary items, Discontinued operations.
3. Horizontal analysis is also called (Points: 4) linear analysis. vertical analysis. trend analysis. common size analysis.
4. Assume the following sales data for a company: 2009 $945,000 2008 780,000 2007 650,000 If 2007 is the base year, what is the percentage increase in sales from 2007 to 2008? (Points: 4) 25% 20% 125% 143%
Percentage increase in sales = (780,000/650,000) x 100 – 100% = 20%
5. Profit margin is calculated by dividing (Points: 4) sales by cost of goods sold. gross profit by net sales. net income by stockholders' equity. net income by net sales.
6. Which of the following is not a profitability ratio? (Points: 4) Payout ratio Profit margin Times interest earned Return on common stockholders' equity
7. Times interest earned is also called the (Points: 4) money multiplier. interest coverage ratio. coupon coverage ratio. premium ratio.
8. The ratio that uses weighted average common shares outstanding in the denominator is the (Points: 4) price-earnings ratio. return on common stockholders' equity. earnings per share. payout ratio.
9. Each of the following is an extraordinary item except the (Points: 4) effects of major casualties, if rare in the area. effects of a newly enacted law or regulation. expropriation of property by a foreign government. losses attributable to labor strikes.