FAR — Financial Accounting & Reporting — Quiz 76

Questions in this quiz (10)

1. Which analysis evaluates financial performance over multiple accounting periods?

   • Horizontal analysis
   • Horizontal analysis
   • Vertical analysis
   • Vertical analysis
   • Ratio analysis
   • Ratio analysis
   • Profitability analysis
   • Profitability analysis

2. Which analysis presents financial statement items as percentages of a total?

   • Horizontal analysis
   • Horizontal analysis
   • Vertical analysis
   • Vertical analysis
   • Liquidity analysis
   • Liquidity analysis
   • Solvency analysis
   • Solvency analysis

3. Which base amount is commonly used in vertical analysis of the income statement?

   • Total assets
   • Total assets
   • Net sales
   • Net sales
   • Total liabilities
   • Total liabilities
   • Equity
   • Equity

4. Which statement best describes the objective of financial statement analysis?

   • To record accounting transactions
   • To record accounting transactions
   • To evaluate performance and financial position
   • To evaluate performance and financial position
   • To reduce company expenses
   • To reduce company expenses
   • To increase revenue
   • To increase revenue

5. Which of the following best defines horizontal analysis?

   • Comparing financial information over multiple periods
   • Comparing financial information over multiple periods
   • Comparing assets and liabilities in one period
   • Comparing assets and liabilities in one period
   • Calculating financial ratios
   • Calculating financial ratios
   • Recording transactions
   • Recording transactions

6. Which of the following best defines vertical analysis?

   • Comparing financial statements over time
   • Comparing financial statements over time
   • Expressing financial items as percentages of a base
   • Expressing financial items as percentages of a base
   • Evaluating liquidity ratios
   • Evaluating liquidity ratios
   • Measuring profitability
   • Measuring profitability

7. Which base amount is commonly used in vertical analysis of the balance sheet?

   • Net income
   • Net income
   • Total assets
   • Total assets
   • Net sales
   • Net sales
   • Cash
   • Cash

8. Which analysis technique helps identify trends across accounting periods?

   • Vertical analysis
   • Vertical analysis
   • Horizontal analysis
   • Horizontal analysis
   • Ratio analysis
   • Ratio analysis
   • Liquidity analysis
   • Liquidity analysis

9. Which ratio measures short-term liquidity excluding inventory?

   • Current ratio
   • Current ratio
   • Quick ratio
   • Quick ratio
   • Debt ratio
   • Debt ratio
   • Profit margin ratio
   • Profit margin ratio

10. Which ratio evaluates how efficiently inventory is controlled?

    • Inventory turnover ratio
    • Inventory turnover ratio
    • Debt ratio
    • Debt ratio
    • Current ratio
    • Current ratio
    • Profit margin ratio
    • Profit margin ratio