Midterm_ACCT 354_Fall 2022_Solutions_Student (1)

1. which of the following transactions and events would result in a deterioration in EBIT Profit Margin? a. selling goods on credit at the normal mark-up b. issuing shares for cash c. the consumption of a prepaid expense from the previous period d. A and B only e. A and C only f. B and C only g. All of the above h. None of the above   2. which of the following transactions and events would result in an improvement in Dividends per share  a. the recognition of income tax expense owing at the end of the period  b. the receipt of cash for dividends from other entities  (increase financing cash flow) c. A and B only  d. A and C only  e. B and C only  f. All of the above  g. None of the above    3. which of the following transactions and events would result in an improvement in Days Purchases Outstanding  a. an adjustment for wages owing at the end of the period b. the identification of an uninsured inventory loss c. selling goods for cash at the normal mark-up d. A and B only e. A and C…

Which of the following may motivate managers to decrease the size of the allowance for doubtful debts Place answer in the marked square -> A performance measure based on sales revenue A performance measure based on gross profit A performance measure based on NPAT 1 2 4 All of the above 5 None of the above

A firm has decided to switch from FIFO to LIFO. Ceteris paribus (all things being equal), what impact will the change in accounting have on the following variables? Assume an inflationary environment. Net profit will: OA increase OB decrease OC not change OD. cannot determine

Please answer number 9 and 10 only no need to explain. Thanks!

2

TB MC Qu. 10-139 (Static) Why doesn't stockholders' equity equal the... Why doesn't stockholders' equity equal the market value of equity? Multiple Choice Stockholders' equity usually does equal the market value of equity. It's due to incorrect entries prepared by accountants. Investors tend to incorrectly price the market value of equity. It's related to the use of historical cost to report many long-term assets and the expensing of value-generating costs such as research and development and advertising.

Which of the following assumptions are necessary for AFN equation to work? 1) The ratios A0/S and LO/S, the profit margin, and payout ratio are stable. 2) Common stock and long-term debt are tied directly to sales. 3) None of the firm's ratios will change. 4) Fixed assets, but not current assets, are tied directly to sales. 5) Last year's total assets were not optimal for last year's sales.

None

do not give solution in image format

1."Other things being equal, do both companies appear to have the ability to meet their obligations as measured by the debt to equity ratio?2.Based solely on the times interest earned ratios, do you reach the same conclusion as in Requirement 1?3.Is the margin of safety provided to creditors by Discount Goods improving or declining in recent years as measured by the average times interest earned ratio?"   Please do not copy and paste some other solutions from here.

Q1) Economies of scale *   A) in the financial markets does not explain why financial intermediaries developed and have become such an important part of our financial structure B) can be used to an advantage by reducing transaction cost. C) both A and B of the above D) neither A nor B of the above.   Q2. Adverse selection [can select more than 1 answer] *   A) is a problem created by asymmetrical information before the transaction. B) can be solved by eliminating asymmetrical information. C) helps explain why banks prefer to make loans secured by collateral. D) helps explain why borrowers are willing to offer collateral to secure their promises to repay loans.   Q3. Because managers (________) have less incentive to maximize profits than the stockholders-owners (________) do, stockholders find it costly to monitor managers; thus, stockholders are reluctant to purchase equities. *   A) principals; agents B) principals; principals C)…

No chatgpt!! A company’s ability to meet its short-term financial obligations is referred to as: A) ProfitabilityB) LiquidityC) SolvencyD) Efficiency solve

In the Quiz attached Question#8, Why debt to equity and current ratios may be impacted?

If CBA Failed to meet earning expectations because Loan Impairment expense was Higher than expected, the ERC is likely to be? A. Small, as imperfections are 'fictitious accounting' B. Big, as markets dislike impairments more than other forms of expenses C. Small, because impairment represents once off expense D. Very large, because loan impressions account for a significant portion of the revenue

Which of the following statements is not correct? Group of answer choices A)Purchasing fixed assets using cash decreases the current ratio. B)Accruing a commission expense will affect the net profit margin ratio. C)Increasing the financial leverage ratio guarantees the net profit margin ratio will increase. D)Purchasing treasury stock results in a decrease in the current ratio. E)All of the above are correct

If in February, MBB DID NOT take up any opportunity that the suppliers offered for early settlement discount, how would its performance be impacted? 1. Gross profit for February will decrease 2. Other things being equal, net cash flow from operating activities will decrease a) Neither of the above is correct b) Only statement 1 is correct c) Both 1 and 2 are correct d) Only statement 2 is correct

Which of the following statements is usually correct? A low receivables turnover is good for the business The lower the total debt-to-equity ratio, the lower the financial risk for a firm The higher the tax rate for a firm, the lower the interest coverage ratio An increase in net profit margin with no change in sales or assets means a poor ROI

Compute the times interest ratio and use it to analyze liabilities.   Show work

Which of the following statements is correct? A. If assets and spontaneously generated liabilities are not projected to grow at the same rate as sales, then the AFN method will provide more accurate forecasts than the projected financial statement method. B. Dividends are paid with cash taken from the accumulated retained earnings account, hence dividend policy does not affect the AFN forecast. C. A negative AFN indicates that retained earnings and spontaneous capital are far more than sufficient to finance the additional assets needed. D. AFN is defined as the funds that a firm must raise internally. E. The AFN equation for forecasting funds requirements requires only a forecast of the firm’s balance sheet. Although a forecasted income statement may help clarify the results, income statement data are not essential because funds needed relate only to the balance sheet.

Market risk is defined as the risk: Question 1Answer a. Incurred by granting loans to companies that do not hold a large market share. b. Incurred in the trading of assets and liabilities due to changes in interest rates, exchange rates and other asset prices. c. That a sudden surge in liability withdrawals may require FIs to liquidate assets at less than fair market prices. d. That an FI loses market share.