All the questions I missed

Question 1

Ratio analysis can be used to compare companies of different sizes?

Answer 1

True

Question 2

The only difference between the Direct Method and the Indirect Method is the way the Financing Activities section is prepared?

Answer 2

False, the only difference is the operating activities.

Question 3

The receipt of a cash dividends would be reported in the Operating Activities section of the Statement of Cash Flows?

Answer 3

True

Question 4

Does the current ratio measure liquidity?

Answer 4

Yes

Question 5

The higher the current ratio the more liquid the company is?

Answer 5

True

Question 6

The gross profit margin is computed by taking net income divided by total assets?

Answer 6

False, Gross profit/Sales revenue

Question 7

EPS can be found on the Balance Sheet?

Answer 7

False, EPS means earnings per share

Question 8

If cash dividends are distributed on a date after dividends have been declared, then overall total liabilities will decrease and total assets will decrease?

Answer 8

True

Question 9

Treasury stock is shown as a reduction to total stockholders’ equity and is reported on the Statement of Stockholders’ Equity?

Answer 9

True

Question 10

Preferred stock is reported on the Statement of Retained Earnings?

Answer 10

False, reported on balance sheet

Question 11

Credits increase retained earnings and common stock

Answer 11

True

Question 12

What does the operating section in direct method pertain to?

Answer 12

Direct cash flow pertaining to revenues and expenses. depreciation of assets goes in this section.

Question 13

What is does the investing activities pertain to?

Answer 13

Buying or selling of long term assets/investments.

Question 14

What does the financing section pertain to?

Answer 14

External financing from owners/lenders. Includes notes payable and paying long term debt.

Question 15

The balance in retained earnings represents the amount of capital contributed by owners in exchange for stock?

Answer 15

False, includes treasury stock as well but that is a contra-equity.

Question 16

The Picasso Co. sold 1,000 shares of $1 par value common stock for $10 a share. As a result, total contributed capital would increase by:

Answer 16

10,000, not 9,000 because that is APC where contributed capital includes par value + APC

Question 17

FICA includes:

Answer 17

Social Security and Medicare.

Question 18

Overall, a distribution of stock dividend will

Answer 18

not change total stockholders’ equity, but decreases total retained earnings

Question 19

equation to horizontally compare two sections and determine percent increase or decrease. (assets, liabilites)

Answer 19

subtract current year from last year and divide by last year.

Question 20

Is distributing a stock dividend included on the statement of cash flow?

Answer 20

No, does not involve cash

Question 21

When a company distributes a cash dividend what is it reported under?

Answer 21

Financing activities.

Question 22

How to find total stock holders equity at end of year

Answer 22

Ending retained earnings (Beg.RE+net income-total dividends) + common stock + PIC excess - treasury stock

Question 23

How to find Ending retained earnings

Answer 23

Beg RE + net income - cash dividends - stock dividends.