QUESTION Santos has a high level of current liabilities compared to its cash on hand. One company executive predicts that this means that Santos will not have a good acid-test ratio. Which of the following points out a flaw in his argument? A) Current liabilities are not relevant to the acid-test ratio. B) The company […]
QUESTION Which of the following, if true, supports the position that Julie should consider a specialty field in accounting? A) Julie wants to eventually pursue an MBA degree. B) Colleges have different policies on whether specialty accounting courses are required. C) Julie is interested in financial crimes. D) Julie is interested in helping a nonprofit […]
QUESTION Which of the following, if true, supports the father’s position? A) Julie has said she wants to work for one of the Big Four accounting and professional services firms. B) The demand for external auditors is expected to grow in the near future. C) Many accountants flooded the job market when the Arthur Andersen […]
QUESTION Which of the following, if true, does NOT strengthen the case that Aardvark needs to hire a full-time financial manager? A) The company needs its cash flow to be continuously monitored. B) The company needs to determine how to market its products so as to reach the largest number of customers. C) The company […]
QUESTION Which of the following, if true, strengthens the case that Streeter & Sons is profitable? A) The company’s sales revenue is low relative to its cost of goods sold. B) The company’s cost of goods sold is low relative to its sales revenue. C) The company has had the same number of customers for […]
QUESTION Which of the following questions about the current state of Streeter & Sons would a balance sheet NOT be able to help answer? A) Is it a good time for the business to grow? B) Can the company survive a season of low revenues? C) Does the company have too many employees? D) Can […]
QUESTION Which of the following, if true, does NOT strengthen the case for Aardvark closely monitoring its cash flow? A) The company needs to make sure it is not spending too much. B) The company needs to make sure it is generating enough revenue. C) The company needs to make sure its employees perform well. […]
QUESTION Which of the following questions is LEAST relevant to a financial manager as he or she develops a financial forecast for Aardvark? A) What are the future plans of the company? B) What is the current state of the local economy? C) What is the future state of the local economy likely to be? […]
QUESTION Which of the following, if true, strengthens the case that an income statement would show Streeter & Sons where its problems lie? A) The company does not have enough shareholders. B) The company’s expenses are too high. C) The company’s owners’ equity is too low. D) The company needs to hire more service specialists. […]
QUESTION Which of the following, if true, weakens the case that more than one type of financial statement should be examined in order to determine a company’s financial health? A) Nowadays, many companies burnish their balance sheet by claiming inflated figures for goodwill. B) An income statement from one year may be radically different from […]
