ACAMS Practice Questions
Accounting Cycle and Classifying Accounts
Accounting For Managers
Accounting for Merchandising Activities
Accounting for Pensions
Accounting Information Systems
Activity Based Costing
Adjusting Accounts for Financial Statements
Advanced Business Economics
Advertising and Public Relations
Advertising and Sales Promotion
An Overview of International Business
Analysis and Forecasting Techniques
Analyzing and Recording Transactions
Applied Business Research
Asset Demand and Supply under Uncertainty
Auditing and Attestation
Behavioral and Allied Sciences
Bonds and Long Term Notes Payable
Business Analytics & Technology Management Chapter 2
Business Analytics & Technology Management Chapter 3
Business Analytics & Technology Management Chapter 4
Business Analytics & Technology Management Chapter 5
Business Analytics & Technology Management Chapter 6
Business and Company Law
Business Ethics and Governance
Business Ethics Exam
Business Law Study guide
Business Organisations and Environment
Business organization and systems
Business Process Performance
California Real Estate
Capital Budgeting and Managerial Decisions
Changes in Accounting Principles
Changing Marketing Environment
Consolidated Financial Statements
Corporate and Business Law
Cost Accounting Final exam
Cost Accumulation Systems
Cost Allocation Techniques
Cost and Managerial Accounting
Cost of Capital
Cost Terms and Classifications
Cost Volume Profit Analysis
Currency Exchange Rates
Customer Relationships and Value
CVP Analysis and Marginal Analysis
Debt and Bankruptcy
Decision Makers Household Sector
Demand for Money
Derivative Instruments and Hedging Activities
Dividends and Payout Policy
Dividends, Shares, and Income
Elasticities of Demand and supply
Employee Training and Development
Environments of Business
Essence of Management
Ethical and Professional Standards
Ethics and Social Responsibility
Ethics for Management Accountants
External Financial Statements and Revenue Recognition
Federal Securities Acts
Financial and the Nonfinancial Sectors
Financial Decision Making
Financial Intermediaries and Financial Markets
Financial Markets and Securities Offerings
Financial Statements and Accounting Transactions
Flexible Budgets and Standard Costs
Florida Real Estate MCQs
Fraud Internal Control and Cash
Fundamental Accounting Principles
Global Marketing and World Trade
Governmental Accounting State and Local
Health and Life Comprehensive Exam
Health and Life Practice Questions
Human Resource Management
Human Resource Management HRM
Human Resource Planning
Importance of Business Economics
Insurance and Risk Management
Insurance License Texas Life and Health
Integrated Marketing Communications and Direct Marketing
Interactive Marketing and Electronic Commerce
Internal Auditing and Systems Controls
Internal Control and Cash
International Trade and Globalisation
Interpersonal and Organizational Communication
Introduction to Business
Introduction to Human Resource Management
Introduction to Human Resources Assessment
Investment Risk and Portfolio Management
Job Order Costing
Life and Health Insurance
Life Insurance Basics
Life Insurance Policies
Life Insurance Policy
Long Term Investment
Long Term Securities
Management and Cost Accounting
Managerial Accounting Concepts and Principles
Managing Organizational Change
Managing Production and Operations
Managing Products and Brands
Market Segmentation Targeting and Positioning
Marketing and Corporate Strategies
Marketing Channels and Wholesaling
Master Budgets and Planning
Mergers and Acquisitions
Money and Banking
National Health Insurance
Not For Profit Accounting
Organization and Operation of Corporations
Organizational Behavior Essentials
Organizational Markets and Buyer Behaviour
Organizational Structure and Design
Personal Selling and Sales Management
Principles and Practices of Management
Production and Operations Management
Profitability Analysis and Analytical Issues
Profitability Analysis and Decentralization
Property Plant and Equipment
Property Plant and Equipment Exam
Reporting and Analyzing Cash Flows
Reporting and Analyzing Long Lived Assets
Reporting and Analyzing Receivables
Responsibility Accounting and Performance Measures
Risk and Procedures for Control
Service Department Costing
Short Term Financing
Short Term Investment
Standard Costs and Variance Analysis
State Health Insurance
Statement of Cash Flow
Statement of Comprehensive Income
Statement of Financial Position
Stock Market and Stock Prices
Strategic Marketing Process
Structure of Interest Rates
Succession and Transfer Taxes
Supply Chain and Logistics Management
System Analysis and Design
Texas Real Estate
The Management Challenge
Total Quality Management
Understanding Exchange Rates
Understanding Interest Rates
Understanding Interest Rates Determinants
Value Added Tax
Profitability Analysis and Analytical Issues
Profitability Analysis and Analytical Issues MCQs
In the current year, Griffin, Inc., had $15 million in sales, while total fixed costs were held to $6 million The firm’s total assets averaged $20 m...
White Knight Enterprises is experiencing a growth rate of 9% with a return on assets of 12%. If the debt ratio is 36% and the market price of the stoc...
In Year 3, Newman Manufacturing’s gross profit margin remained unchanged from Year 2. But in Year 3, the company’s net profit margin declined from...
Corporate tax rates increased.
Cost of goods sold increased relative to sales.
Sales increased at a faster rate than operating expenses.
Common share dividends increased.
Colonie, Inc., expects to report net income of at least $10 million annually for the foreseeable future. Colonie could increase its return on equity b...
The president of Reading Manufacturing, Inc., is establishing performance goals for each of the company’s manufacturing plants The data below repres...
Acme Company has sales of $100,000, cost of sales of $40,000, interest expense of $4,000, taxes of $18,000 and operating expenses of $15,000, What is ...
For a given level of sales and holding all other financial statement items constant a company’s return on equity (ROE) will
Increase as their debt ratio decreases.
Decrease as their cost of goods sold as a percent of sales decrease.
Decrease as their total assets increase.
Increase as their equity increases.
Anderson Cable wishes to calculate its return on assets. You know that the return on equity is 12% and that the debt ratio is 40%. What is the return ...
The following information pertains to Andrew Co. for the year ended December 31: Sales $720,000 Net income 120,000 Average total assets 480,000 Wh...
(720,000 ÷ 480,000) × (720,000 ÷ 120,000)
(480,000 ÷ 720,000) × (720,000 ÷ 120,000)
(720,000 ÷ 480,000) × (120,000 ÷ 720,000)
(480,000 ÷ 720,000) × (120,000 ÷ 720,000)
Transnational Motors has decided to make an additional investment in its operating assets, which are financed by debt. Assuming all other factors rema...
Increase No Change Increase
No Change Decrease Decrease
No Change Increase Decrease
Decrease Decrease Decrease
Interstate Motors has decided to make an additional investment in its operating assets that are financed by debt. Assuming all other factors remain co...
Increase No change Increase
No change Decrease Decrease
No change Increase Decrease
Decrease Decrease Decrease
Of the following items, the one item that would not be considered in evaluating the adequacy of the budgeted annual operating income for a company is ...
Earnings per share.
Industry average for earnings on sales.
Internal rate of return.
Last year, a corporation had a total asset turnover ratio of 1.5, a profit margin of 10%, and an equity multiplier of 2. This year, if the profit marg...
The equity multiplier remains 2.0, and the total asset turnover increases to 1.7.
The equity multiplier remains 2.0, and the total asset turnover increases to 3.5.
The equity multiplier increases to 2.2, and the total asset turnover remains 1.5.
The equity multiplier increases to 3.0, and the total asset turnover decreases to 1.25.
A corporation’s return on equity can be calculated if you know its
Sustainable equity growth rate and dividend payout ratio.
Debt-equity ratio and market-to-book ratio.
Market-to-book ratio and equity multiplier.
Dividend yield and earnings yield.
Which one of the following actions may increase a company’s return on assets?
Purchase of a new corporate headquarters.
An increase in inventory levels for a future store expansion.
Replacement of capital equipment via an operating lease.
Reduction of long-term debt through the issuance of common stock.
The DuPont formula involves which combination of financial elements in its computation?
Net profit margin, total asset turnover, and equity multiplier.
Total asset turnover and sales turnover profitability.
Profit margin, sales turnover, and asset-use efficiency.
Total asset turnover, sales turnover, and equity multiplier.
According to the DuPont formula, which one of the following will not increase a profitable firm’s return on equity?
Increasing total asset turnover.
Increasing net profit margin.
Lowering corporate income taxes.
Lowering equity multiplier.
Book value per common share represents the amount of equity assigned to each outstanding share of common stock. Which one of the following statements ...
Market price per common share usually approximates book value per common share.
Book value per common share can be misleading because it is based on historical cost.
A market price per common share that is greater than book value per common share is an indication of an overvalued stock.
Book value per common share is the amount that would be paid to shareholders if the company were sold to another company.
The issuance of new shares in a five-for-one split of common stock
Decreases the book value per share of common stock.
Increases the book value per share of common stock.
Increases total shareholders’ equity
Decreases total shareholders’ equity
The book value per share calculation of a corporation is usually significantly different from the market value of the stock’s selling price due to t...
Use of accrual accounting in preparing financial statements.
Omission of the number of preferred shares outstanding at year-end in the calculation.
Use of historical costs in preparing financial statements.
Omission of total assets from the numerator in the calculation.
The equity section of Jones Corporation’s statement of financial position is presented below: Preferred stock, 6%, $100 par $40,000,000 Common sto...
Which one of the following statements about the price-earnings (P/E) ratio is true?
A company with high growth opportunities ordinarily has a high P/E ratio.
A P/E ratio has more meaning when a firm has losses than when it has profits.
A P/E ratio has more meaning when a firm has abnormally low profits in relation to its asset base.
A P/E ratio expresses the relationship between a firm’s market price and its net sales
Information concerning Hamilton’s common stock is presented below for the fiscal year ended May 31, Year 2. Common stock outstanding 750,000 State...
The following information is provided about the common stock of Evergreen, Inc., at the end of the fiscal year: Number of shares outstanding 1,800,00...
Information concerning the common stock of Morris Company as of November 30, the end of the company’s current fiscal year is presented below Number...
Kevlin, Inc., has 250,000 shares of $10 par value common stock outstanding. For the current year, Kevlin paid a cash dividend of $3.50 per share and h...
A steady drop in a firm’s price-earnings ratio could indicate that
Earnings per share has been increasing while the market price of the stock has held steady.
Earnings per share has been steadily decreasing.
The market price of the stock has been steadily rising.
Both earnings per share and the market price of the stock are rising.
At year end, Appleseed Company reported net income of $588,000. The company has 10,000 shares of $100 par value, 6% preferred stock and 120,000 shares...
Archer, Inc., has 500,000 shares of $10 par value common stock outstanding. For the current year, Archer paid a cash dividend of $4.00 per share and h...
Overvalued by approximately 25%.
Overvalued by approximately 10%.
Undervalued by approximately 10%.
Undervalued by approximately 25%.
When reviewing a credit application, the credit manager should be most concerned with the applicant’s
Profit margin and return on assets.
Price-earnings ratio and current ratio.
Working capital and return on equity.
Working capital and current ratio.
Donovan Corporation recently declared and issued a 50% stock dividend. This transaction will reduce the company’s
Book value per common share.
Debt to equity ratio.
Return on operating assets.
What type of ratio is earnings per share?
A company had 150,000 shares outstanding on January 1. On March 1, 75,000 additional shares were issued through a stock dividend. Then on November 1, ...
Blackmer Company had 80,000 shares of common stock outstanding as of December 1, Year 1 the beginning of the companyâ€™s fiscal year The company ...
$1.18 per share.
$1.07 per share.
$1.20 per share.
$1.23 per share.
The Dwyer Company balance sheet indicates that the company has $2,000,000 of 7.5% convertible bonds, $1,000,000 of 9% preferred stock, par value $100,...
For the year ended May 31, Year 2, Cooper, Inc., had per-share earnings of $4.80 Cooper’s outstanding stock for the Year 1-Year 2 fiscal year consis...
Baylor Company paid out one-half of last year’s earnings in dividends Baylor’s earnings increased by 20%, and the amount of its dividends increase...
Residco, Inc., expects net income of $800,000 for the next fiscal year. Its targeted and current capital structure is 40% debt and 60% common equity. ...
All else being equal, a company with a higher dividend-payout ratio will have a debt-to-assets ratio and a current ratio. List A List B
Which of the following is correct for a firm with $100,000 in net earnings, 10,000 shares, and a 30% payout ratio?
Retained earnings will increase by $30,000.
Each share will receive a $0.30 dividend.
$30,000 will be spent on new investment.
The dividend per share will equal $3.00.
Rinker Corporation had 40,000 shares of common stock outstanding on November 30, Year 1. On May 20, Year 2, a 10% stock dividend was declared and dist...
$5.22 per share.
$3.82 per share.
$5.74 per share.
$3.38 per share.
A drop in the market price of a firm’s common stock will immediately increase its
Return on equity.
Dividend payout ratio.
Watson Corporation computed the following items from its financial records for the year: Price-earnings ratio 12 Payout ratio 0.6 Asset turnover ra...
An increase in the market price of a company’s common stock will immediately affect its
Debt to equity ratio.
Earnings per share.
Dividend payout ratio.
For the most recent fiscal period, Oakland, Inc., paid a regular quarterly dividend of $0.20 per share and had earnings of $3.20 per share. The market...
The dividend yield ratio is calculated by which one of the following methods?
Market price per share divided by dividends per share.
Earnings per share divided by dividends per share.
Dividends per share divided by market price per share.
Dividends per share divided by earnings per share.
Mayson Company reported net income of $350,000 for last year. The company had 100,000 shares of $10 par value common stock outstanding and 5,000 share...
Douglas Company purchased 10,000 shares of its common stock at the beginning of the year for cash. This transaction will affect all of the following e...
Debt to equity ratio.
Earnings per share.
Net profit margin.
Mayson Ltd. reported net income of £3,500,000 for last year. The company had 100,000 shares of common stock outstanding with a par value of £1 and 5...
A corporation has an earnings yield of 12% and a dividend yield of 3%. What is its dividend payout ratio?
Keefer, Inc., recently reported earnings per share of $3.00. A security analyst recently issued a report that Keefer earnings are forecasted to grow t...
If a stock currently sells for $40.00 and has annual earnings per share of $3.00, the P/E ratio is
The capacity of the firm’s operations to produce cash inflows is
When calculating ratios involving income, an adjustment is most likely to be made for
Nonrecurring gains and losses.
Fixed overhead costs.
Which of the following is an item with high earnings persistence?
Gain on disposal of old equipment.
Sales from a new product.
The key difference between accounting profit and economic profit is that economic profit
Highlights the historical cost concept.
Calculates changes in supply using EOQ models.
Excludes income tax and interest expense.
Considers the opportunity cost of equity.
A company could negatively affect its earnings quality if it frequently
Constructed plants in countries with unstable currency.
Invested long-term in an erratic stock or bond market.
Materially changed accounting estimates.
Offered significant sales discounts.
Baldwin Corporation’s inventory expressed as a percentage of current assets increased from 25% last July to 35% this July. The factor that is least ...
Is a seasonal company with traditionally higher activity in the summer months.
Is beginning to experience high growth.
Has inventory that is becoming obsolete.
Used a material amount of cash from selling its short-term investments to purchase land.
Which one of the following ratios would be most affected by miscellaneous or non-recurring income?
Net profit margin.
Operating profit margin.
Gross profit margin.
Global Company bought a new machine and estimated that the machine will have a useful life of 10 years and a salvage value of $5,000. After the machin...
Revisions in useful life are permitted only if approved by the SEC.
Retroactive changes must be made to correct previously recorded depreciation.
Only future years will be affected by the revision.
Both current and future years will be affected by the revision.
At the beginning of last year, Falcon Manufacturing Co. increased its selling price by $10 per unit This price increase has no effect on the volume of...
Increase as a result of the price increase.
Decline as a result of the price increase.
Change as a result of the price increase, but the direction of such change cannot be determined.
Hampel Corporation’s gross profit margin has decreased substantially over the past 3 years Which one of the following best explains this decrease?
The cost of merchandise inventory has decreased while sales prices have remained the same.
Ending merchandise inventory is higher than expected.
A physical count of merchandise inventory showed missing inventory higher than expected.
Cost of goods sold has remained steady while total expenses have increased.
Grimball Corporation’s gross profit margin has remained fairly constant for the past several years. Which one of the following is the best explanati...
The cost of goods sold and sales have decreased by the same percentage.
The cost of goods sold and sales have decreased by the same dollar amount.
Net sales and net income have remained constant.
The cost of goods has remained steady.
Network Corporation made a large arithmetic error in the preparation of its year-end financial statements by improper placement of an extra digit in ...
An increase in bad debt expense for the year in which the error is discovered.
A component of income for the year in which the error is discovered, but separately listed on the income statement and fully explained in a note to the financial statements.
An extraordinary item for the year in which the error was made.
A prior-period adjustment to the opening retained earnings balance.
A construction company has signed $1,000,000 in new contracts. During the current year, 10% of the required work for these contracts was performed. Hi...
A U.S. company and a German company purchased the same stock on the German stock exchange and held the stock for 1 year. The value of the euro weakene...
Indeterminate from the information provided.
If an entity’s books of account are not maintained in its functional currency U S GAAP require remeasurement into the functional currency prior to t...
An investment in bonds to be held until maturity.
A plant asset and the associated accumulated depreciation.
A patent and the associated accumulated amortization.
The revenue from a long-term construction contract.
U.S. GAAP require the application of the functional currency concept. Before the financial statements of a foreign subsidiary may be translated into t...
Its cash flows are primarily in foreign currency and do not affect the parent’s cash flows.
Its sales prices are responsive to exchange rate changes and to international competition.
Its labor, material, and other costs are obtained in the local market of the foreign subsidiary.
Its financing is primarily obtained from local foreign sources and from the subsidiary’s operations
The economic effects of a change in foreign exchange rates on a relatively self-contained and integrated operation within a foreign country relate to ...
Directly affect cash flows but should not be reflected in income.
Directly affect cash flows and should be reflected in income.
Do not directly affect cash flows and should not be reflected in income.
Do not directly affect cash flows but should be reflected in income.
U.S. GAAP require that, in a highly inflationary economy, the financial statements of a foreign entity be remeasured as if the functional currency wer...
An inflation rate of at least 33% in the most recent past year.
An inflation rate of at least 50% in the most recent past year.
An inflation rate of at least 100% in the most recent past year.
A cumulative inflation rate of at least 100% over a 3-year period.
U.S. GAAP state that transaction gains and losses have direct cash flow effects when foreign-denominated monetary assets are settled in amounts greate...
At the date the transaction originated.
On a retroactive basis.
In the period the exchange rate changes.
Only at the year-end balance sheet date.
U.S. GAAP define foreign currency transactions as those denominated in other than an entity’s functional currency. Transaction gains and losses are ...
Adjustments to the beginning balance of retained earnings.
A component of equity.
A component of income from continuing operations.
Unrealized foreign currency gains and losses included in the other comprehensive income section of a consolidated balance sheet represent
Foreign currency transaction gains and losses.
The amount resulting from translating foreign currency financial statements into the reporting currency.
Remeasurement gains and losses.
Accounting not in accordance with U.S. generally accepted accounting principles.
When restating financial statements originally recorded in a foreign currency,
Income taxes are ignored in calculating and disclosing the results of foreign currency translations.
A component of annual net income “Adjustment from Foreign Currency Translation ” should be presented in the notes to the financial statements or in a separate schedule.
The aggregate transaction gain or loss included in net income should be disclosed in the financial statements or in the notes to the financial statements.
The financial statements should be adjusted for a rate change that occurs after the financial statement date but prior to statement issuance.
Formerly, there was significant disagreement among informed observers regarding the basic nature, information content, and meaning of results produced...
Change the accounting model to recognize currently the effects of all changing prices in the primary statements.
Defer any recognition of changing currency prices until they are realized by an actual exchange of foreign currency into the reporting currency.
Recognize currently the effect of changing currency prices on the carrying amounts of designated foreign assets and liabilities.
Recognize currently the effect of changing currency prices on the carrying amounts of all foreign assets, liabilities, revenues, expenses, gains, and losses.
The Brinjac Company owns a foreign subsidiary Included among the subsidiary’s liabilities for the year just ended are 400,000 drongos of revenue rec...
FreezeIt, Inc., is a manufacturer of refrigeration systems based out of the United States with one subsidiary in Canada. The Canadian subsidiary expor...
A reduction in expenses.
A reduction in revenues.
An increase in cash flows.
An increase in profit margins.
Willow World is a privately-held manufacturer of home furnishings based out of the United States. Willow World has one subsidiary in Mexico that expo...
A decrease in the ROI.
An increase in the ROI.
No change in the ROI.
Not enough data has been provided.
A U.S.-based company has transaction exposure if it has an account
Payable due in 6 months with a German company denominated in U.S. dollars.
Receivable due in 6 months with a German company denominated in U.S. dollars.
Payable due in 6 months with a German company denominated in euros.
Payable and account receivable with two German companies both due in 6 months, of equal amounts, and denominated in euros.
Which one of the following statements best reflects the relationship between the results of financial ratios calculated in a local currency versus tho...
Financial ratio results are similar under translation and remeasurement, and ratios under translation are also often similar to those in the local currency.
Financial ratio results are similar under translation and remeasurement, but ratios under translation are often different from those in the local currency.
Financial ratio results are different under translation and remeasurement, but ratios under translation are often similar from those in the local currency.
Financial ratio results are different under translation and remeasurement, and ratios under translation are also often different from those in the local currency.
In financial statement analysis, expressing all financial statement items as a percentage of base-year amounts is called
Horizontal common-size analysis.
Vertical common-size analysis.
On a common-size balance sheet, what would represent 100%?
Total current assets.
Total stockholders’ equity
A company has the following summarized income statement: Sales $1000 Sales returns and allowances 10 Cost of goods sold 600 Gross profit 390 Oper...
In assessing the financial prospects for a firm, financial analysts use various techniques. An example of vertical, common-size analysis is
An assessment of the relative stability of a firm’s level of vertical integration.
A comparison in financial ratio form between two or more firms in the same industry.
Advertising expense is 2% greater compared with the previous year.
Advertising expense for the current year is 2% of sales.
Leases should be classified by the lessee as either operating leases or capital leases. Which of the following statements best characterizes operating...
The benefits and risks of ownership are transferred from the lessor to the lessee.
The lessee records leased property as an asset and the present value of the lease payments as a liability.
Operating leases transfer ownership to the lessee, contain a bargain purchase option, are for more than 75% of the leased asset’s useful life or have minimum lease payments with a present value in excess of 90% of the fair value of the leased asset.
The lessor records lease revenue, asset depreciation, maintenance, etc., and the lessee records lease payments as rental expense.
Careful reading of an annual report will reveal that off-balance-sheet debt includes
Amounts due in future years under operating leases.
Transfers of accounts receivable without recourse.
Current portion of long-term debt.
Amounts due in future years under capital leases.
Which one of the following is not a form of off-balance-sheet financing?
Sale of receivables.
Foreign currency translations.
Special purpose entities.
An investment in trading securities is measured on the statement of financial position at the
Cost to acquire the asset.
Accumulated income minus accumulated dividends since acquisition.
Lower of cost or market.
An investment in available-for-sale securities is measured on the statement of financial position at the
Cost to acquire the asset.
Accumulated income less accumulated dividends since acquisition.
Par or stated value of the securities.
When using fair value accounting it would be to a firm’s benefit to report the liability at fair value when it has
$32 million in outstanding bonds trading at 101.
$50 million in variable-rate preferred shares outstanding.
$28 million in outstanding bonds trading at 98.
$25 million in put-able bonds trading at 102.
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