22.1   Learning Objective 22-1


1) A statement comparing data from two or more consecutive periods is called a:

A) comparative balance sheet.

B) comparative income statement.

C) common-size statement.

D) both A and B.


2) In a comparative balance sheet, the ending Cash for 2012 was $315,000 and is $270,000 for 2013. The net increase or decrease from 2012 to 2013 is:

A) 86.0%.

B) 14.3%.

C) 26.4%.

D) 16.7%.


3) To find the percent of increase or decrease of an item in a comparative balance sheet you use the formula: % change = amount of change/base (old year).


22.2   Learning Objective 22-2


1) Comparative reports in which each item is expressed as a percentage of a base amount without dollar amounts are called:

A) comparative financial statements.

B) common-size statements.

C) cash flow analysis.

D) horizontal analysis.

2) For vertical analysis purposes, a base item on a balance sheet is:

A) total assets.

B) total equity.

C) total liabilities.

D) net equity.


3) For vertical analysis purposes, the base item on an income statement is:

A) net income.

B) net sales.

C) total expenses.

D) total sales.


4) Statements that are often used to compare similar businesses are called:

A) comparative analysis.

B) vertical analysis.

C) horizontal analysis.

D) common-size statements.


5) A common-size comparative statement shows:

A) percents.

B) dollar increases/decreases.

C) whole dollar amounts.

D) None of the above.

6) If Cash is $2,345 in 20X2 and $3,671 in 20X1, what is the percent of increase or (decrease) from 20X1 to 20X2?

A) 56.55%

B) (56.55%)

C) 36.12%

D) (36.12%)


7) If total assets are $6,000, what is the vertical analysis for Cash when it has a balance of $2,400?

A) 40%

B) 60%

C) 250%

D) 25%





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