Call / Whatsapp  # A horizontal analysis performed on a statement of retained earnings

57. A horizontal analysis performed on a
statement of retained earnings would not
show a percentage change in

a. dividends paid.

b. net income.

c. expenses.

d. beginning retained earnings.

58. Under which of the following cases may a
percentage change be computed?

a. The trend of the balances is decreasing but
all balances are positive.

b. There is no balance in the base year.

c. There is a positive balance in the base year
and a negative balance in the subsequent year.

d. There is a negative balance in the base year
and a positive balance in the subsequent year.

59. Assume the following sales data for a
company:

2014 \$945,000

2013 877,500

2012 675,000

If 2012
is the base year, what is the percentage increase in sales from 2012 to 2013?

a. 76.9%

b. 30%

c. 40%

d. 71.4%

60. Assume the following cost of goods sold
data for a company:

2014 \$1,704,000

2013 1,400,000

2012 1,200,000

If 2012
is the base year, what is the percentage increase in cost of goods sold from
2012 to 2014?

a. 70.4%

b. 42%

c. 85.7%

d. 117%

61. Saira,
Inc. has the following income statement (in millions):

SAIRA,
INC.

Income
Statement

For the Year
Ended December 31, 2014

Net Sales \$300

Cost of Goods Sold
180

Gross Profit 120

Operating Expenses 45

Net Income \$75

Using
vertical analysis, what percentage is assigned to Cost of Goods Sold?

a. 40%

b. 60%

c. 100%

d. None
of these answer choices are correct.

62. Saira, Inc. has the
following income statement (in millions):

SAIRA,
INC.

Income
Statement

For the Year
Ended December 31, 2014

Net Sales \$300

Cost of Goods Sold
180

Gross Profit 120

Operating Expenses 45

Net Income \$75

Using
vertical analysis, what percentage is assigned to Net Income?

a. 625%

b. 40%

c. 25%

d. None
of these answer choices are correct.

63. Vertical analysis is also called

a. common
size analysis.

b. horizontal
analysis.

c. ratio
analysis.

d. trend analysis.

64. Vertical analysis is a technique which
expresses each item within a financial statement

a. in dollars and cents.

b. in terms of a percentage of the item in the
previous year.

c. in terms of a percent of a base amount.

d. starting with the highest value down to the
lowest value.

65. In common size analysis,

a. a base amount is required.

b. a base amount is optional.

c. the same base is used across all financial
statements analyzed.

d. the results of the horizontal analysis are
necessary inputs for performing the analysis.

66. In performing a vertical analysis, the base
for prepaid expenses is

a. total current assets.

b. total assets.

c. total liabilities and stockholders’ equity.

d. prepaid expenses.

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