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Exam 3: The Balance Sheet and Financial Disclosures

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Question 31

Multiple Choice

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When a company pays its bill from a plumber for previous services on account:

A) Its debt to equity ratio always decreases.
B) Its acid-test ratio always remains unchanged.
C) Its current ratio always remains unchanged.
D) Its return on shareholders' equity always decreases.

E) None of the above
F) A) and C)

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Question 32

Multiple Choice

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The final paragraph of the audit report:

A) Provides the auditors' opinion on the fairness of the financial statements.
B) Provides the auditor's opinion on the effectiveness of internal control.
C) Describes the scope of the audit.
D) States management's responsibility for the financial statements.

E) All of the above
F) C) and D)

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Question 33

Multiple Choice

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The acid-test ratio is also known as the:

The compensation of top executives is disclosed in the proxy statement.

Listed below are 5 terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the correct term.

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken. -

Use the following to answer questions The balance sheet for Altoid Co.is shown below. Selected 2016 income statement information for Altoid Co.includes: Required: Compute the following financial statement ratios for 2016: -Altoid Co.'s times interest earned ratio.Round your answer to two decimal places.

Use the following to answer questions Spartan Sportswear's current assets consist of cash,marketable securities,accounts receivable,and inventories.The following data were abstracted from a recent financial statement: Required: Compute the following for Spartan: -Shareholders' equity

HHF's long-term debt to equity ratio equity is:

Use the following to answer questions The balance sheet for Altoid Co.is shown below. Selected 2016 income statement information for Altoid Co.includes: Required: Compute the following financial statement ratios for 2016: -Altoid Co.'s acid-test ratio.Round your answer to two decimal places.

Which of the following is not a financing ratio?

An example of an error would be:

The following balance sheet information (in $ millions)comes from the Annual Report to Shareholders of Merry International Inc.for the 2016 fiscal year.Certain amounts have been replaced with question marks to test your understanding of balance sheets.In addition,you are provided with the following information from an analysis of Merry's financial position at the same date: Current ratio = 1.352259;Acid-test ratio = 0.5769692;Debt to equity ratio = 4.6675078. Required: Compute the missing amounts (rounded to the nearest $ in millions)in the balance sheet.

The December 31,2016,post-closing trial balance ($ in thousands)for Libby Corporation is presented below: Required: Prepare a classified balance sheet for Libby Corporation at December 31,2016.

Use the following to answer questions The condensed balance sheet and income statement for Marjoram Company are presented below. -Compute the return on shareholders' equity ratio for Marjoram Company.Round your answer to two decimal places.

A payment on account has no effect on working capital but will increase the current ratio if it is already greater than 1.0.

Use the following to answer questions Bronco Electronics' current assets consist of cash,marketable securities,accounts receivable,and inventories.The following data were abstracted from a recent financial statement: Required: Compute the following for Bronco: -Noncurrent assets

Liquidity refers to:

A subsequent event for an entity with a December 31,2016,year-end would not include: