Question : 31. The inventory turnover rate indicates how quickly inventory sells. 32. In a : 1267488

 

 

31. The inventory turnover rate indicates how quickly inventory sells. 
 

 

32. In a single-step income statement, all revenue items are listed then all expense items are combined and deducted from total revenue. 
 

 

33. In a classified balance sheet, assets are subdivided into current assets, plant and equipment and other assets, while liabilities are all classified as current. 
 

 

34. The more pessimistic investors' expectations regarding a company's future performance the lower the price/earnings ratio is likely to be. 
 

 

35. A company should carry the amount of working capital necessary to conduct operations not necessarily maximize its working capital. 
 

 

 

Multiple Choice Questions
 

36. In order for investors and creditors to decide whether to invest in a company or loan a company funds they may 
A. Analyze financial statements.
B. Focus on corporate governance.
C. Both of the above.
D. Neither of the above.

 

 

37. A comparative financial statement 
A. Places the balance sheet, the income statement and the statement of cash flows side by side in order to compare the results.
B. Places two or more years of a financial statement side by side in order to compare results.
C. Places the financial statements of two or more companies side by side in order to compare results.
D. Places the dollar amounts next to the percentage amounts of a given year for the income statement.

 

 

38. The changes in financial statement items from a base year to following years are called: 
A. Money changes
B. Trend percentages
C. Component percentages
D. Ratios

 

 

39. The measurement of the relative size of each item included in a total is called: 
A. Money changes
B. Trend percentages
C. Component percentages
D. Ratios

 

 

40. One number expressed as a percentage of another is called: 
A. Money changes
B. Trend percentages
C. Component percentages
D. Ratios