Questão 1
Questão
Which of the following is least likely to be considered a role of financial statement analysis?
Responda
-
Determining whether to invest in the company's securities.
-
Assessing the management skill of the company's executives.
-
To make economic decisions.
Questão 2
Questão
A company collects cash from a customer to settle an account receivable. What effect does this transaction have on the
company's total assets and total shareholders' equity?
Assets Equity
Responda
-
Increase Increase
-
No effect Increase
-
No effect No effect
Questão 3
Questão
The Management Discussion and Analysis (MD&A) portion of the financial statements:
Responda
-
is not required by the SEC.
-
includes such items as discontinued operations, extraordinary items, and other
unusual or infrequent events.
-
includes audited disclosures that help explain the information summarized in the
financial statements.
Questão 4
Questão
In the expanded form of the accounting equation, assets equal liabilities plus contributed capital plus:
Responda
-
ending retained earnings minus beginning retained earnings.
-
beginning retained earnings plus revenue minus expenses.
-
ending retained earnings.
Questão 5
Questão
According to the IASB, which of the following least accurately describes financial reporting? Financial reporting:
Responda
-
provides information about changes in financial position of an entity.
-
uses the information in a company's financial statements to make economic decisions.
-
is useful to a wide range of users.
Questão 6
Questão
Alpha Company reported the following financial statement information:
December 31, 2006:
Assets $70,000
Liabilities 45,000
December 31, 2007:
Assets 82,000
Liabilities 55,000
During 2007:
Stockholder investments 3,000
Net income ?
Dividends 6,000
Calculate Alpha's net income for the year ended December 31, 2007 and the change in stockholders' equity for the year
ended December 31, 2007.
Net income Change in stockholders' equity
Responda
-
$5,000
$2,000
decrease
-
($3,000)
$2,000
increase
-
$5,000
$2,000
increase
Questão 7
Questão
What is the fundamental balance sheet equation?
Responda
-
Assets = Liabilities + Stockholders' Equity (A = L + E).
-
Liabilities = Assets + Stockholders' Equity (L = A + E).
-
Assets = Stockholders' Equity Liabilities
(A = E L).
Questão 8
Questão
Prema Singh is the bookkeeper for Octabius Industries. Singh has been asked by the CFO of Octabius to review all purchases
that occurred between February 1 and February 8 to investigate an error on the receiving dock. Singh will most likely look at
the:
Responda
-
initial trial balance.
-
general ledger.
-
general journal.
Questão 9
Questão
Beta Company reported the following financial statement information:
December 31, 2006:
Assets $58,000
Liabilities 28,000
December 31, 2007:
Assets ?
Liabilities 38,000
During 2007:
Stockholder investments 15,500
Net income 18,000
Dividends 7,750
Calculate Beta's total assets and stockholders' equity as of December 31, 2007.
Total assets Stockholders' equity
Responda
-
$93,750 $30,000
-
$93,750 $55,750
-
$79,250 $55,750
Questão 10
Questão
An accounting entry that updates the historical cost of an asset to current market levels is best described as:
Questão 11
Questão
Which of the following financial reporting choices is permitted under IFRS but not under U.S. GAAP?
Responda
-
Netting deferred tax assets with deferred tax liabilities.
-
Excluding actuarial gains and losses from balance sheet pension items.
-
Revaluing plant and equipment upward.
Questão 12
Questão
Accruals are best described as requiring an accounting entry:
Responda
-
when the earliest event in a transaction occurs.
-
only when a good or service has been provided.
-
when an expense has been incurred.
Questão 13
Questão
Which of the following statements represents information at a specific point in time?
Questão 14
Questão
Which of the following statements about proxy statements is least accurate? Proxy statements are:
Questão 15
Questão
When a publicly traded U.S. company prepares a proxy statement for its shareholders prior to the annual meeting or other
shareholder vote, it also files the statement with the SEC as Form:
Questão 16
Questão
Which of the following is an analyst least likely to rely on as objective information to include in a company analysis?
Questão 17
Questão
Wichita Corporation reported the following balances as of December 31, 2007:
Cash $?
Accounts payable 16,000
Accounts receivable 58,000
Additional paidin
capital 42,000
Common stock 19,600
Inventory 12,000
Plant and equipment 26,800
Notes payable 20,000
Retained earnings 32,000
Calculate Wichita's cash and total assets as of December 31, 2007 based only on these entries.
Cash Total assets
Responda
-
$32,800 $129,600
-
$32,800 $113,600
-
$16,000 $129,600
Questão 18
Questão
A firm engages in a new type of financial transaction that has a material effect on its earnings. An analyst should most likely be
suspicious of the new transaction if:
Responda
-
the transaction is not governed by existing regulations.
-
no accounting standard exists that applies to the transaction.
-
management has not explained its business purpose.
Questão 19
Questão
Reading the footnotes to a company's financial statements and the Management Discussion & Analysis is least likely to help
an analyst determine:
Responda
-
how well the financial statements reflect the company's true performance.
-
the various accruals, adjustments and assumptions that went into the financial
statements.
-
the detailed information that underlies the company's accounting system.
Questão 20
Questão
Which of the following financial reporting choices is permitted under IFRS but not under U.S. GAAP?
Responda
-
Netting deferred tax assets with deferred tax liabilities.
-
Revaluing plant and equipment upward.
-
Excluding actuarial gains and losses from balance sheet pension items.
Questão 21
Questão
Information about a company's financial position at a point in time is most likely found in the:
Responda
-
income statement.
-
balance sheet.
-
cash flow statement.
Questão 22
Questão
Allowance for bad debts and investment in affiliates are most likely to be shown as what types of accounts?
Allowance for bad debts Investment in affiliates
Responda
-
Liabilities Asset
-
Contraasset
Asset
-
Contraasset
Liabilities
Questão 23
Questão
Characteristics of a coherent financial reporting framework are best described as:
Responda
-
materiality, comprehensiveness, and aggregation.
-
consistency, materiality, and transparency.
-
transparency, consistency, and comprehensiveness.
Questão 24
Questão
Which of the following would NOT require an explanatory paragraph added to the auditors' report?
Responda
-
Statements that the financial information was prepared according to GAAP.
-
Doubt regarding the "going concern" assumption.
-
Uncertainty due to litigation.
Questão 25
Questão
Accumulated depreciation and treasury stock are most likely to be shown as what types of accounts?
Accumulated Treasury stock
depreciation
Responda
-
Liability Equity
-
Contraasset
Contraequity
-
Contraasset
Contraequity
Questão 26
Questão
Professional organizations of accountants and auditors that establish financial reporting standards are called:
Questão 27
Questão
Management disclosure of the likely impact of implementing recently issued accounting standards is least likely to:
Responda
-
conclude that the standard will not affect the financial statements materially.
-
conclude that the standard does not apply.
-
state that the impact of the standard is impossible to determine.
Questão 28
Questão
The Management Discussion and Analysis (MD&A) portion of the financial disclosure is least likely required to discuss:
Questão 29
Questão
Which of the following statements about financial statement analysis and reporting is least accurate?
Responda
-
Providing information about changes in a company's financial position is a role
of financial reporting.
-
Deciding whether to recommend a company's securities to investors is a role of
financial statement analysis.
-
Financial statement analysis focuses on the way companies show their financial
performance to investors by preparing and presenting financial statements.
Questão 30
Questão
According to the IASB conceptual framework, characteristics that enhance relevance and faithful representation include:
Responda
-
comparability and thoroughness.
-
timeliness and verifiability.
-
assurance and understandability.
Questão 31
Questão
In the financial statement analysis framework, using the data to address the objectives of the analysis and deciding what
conclusions or recommendations the information supports is best described as:
Questão 32
Questão
Jack Rivers is an investment analyst for the equity fund of a family office. The head of the family, Charlotte Blackmon, is
concerned that management may be manipulating the earnings of some of the companies that the fund invests in. Rivers
explains to Blackmon, "Even though we don't have access to the detailed transactions that underlie the financial statements,
we can be sure that management is not manipulating earnings because I read the footnotes to the financial statements of
every company we invest in. The footnotes would disclose any deviation from appropriate accounting parameters." Rivers is:
Responda
-
correct.
-
incorrect because even within appropriate accounting parameters, management can
manipulate earnings through the assumptions that rely on their discretion.
-
Financial statements could potentially take any form if reporting standards didn't exist.
Questão 33
Questão
Which of the following statements about financial statements and reporting standards is least accurate?
Responda
-
Reporting standards focus mostly on format and presentation and allow
management wide latitude in assumptions.
-
The objective of financial statements is to provide economic decision makers with
useful information.
-
Financial statements could potentially take any form if reporting standards didn't exist.
Questão 34
Questão
Which of the following is the least likely to be considered an accrual for accounting purposes?
Questão 35
Questão
Washburn Motors signs a contract to sell a $100,000 luxury sedan to be delivered next month, and receives a $20,000 cash
down payment from the buyer. How will the transaction most likely affect Washburn's assets and liabilities?
Assets Liabilities
Responda
-
Increase Unchanged
-
Increase Increase
-
Unchanged Unchanged
Questão 36
Questão
Making a profitable sale on credit is most likely to have which of the following effects?
Responda
-
Increase assets and decrease liabilities.
-
Increase assets and increase equity.
-
Decrease assets and increase equity.
Questão 37
Questão
Which of the following is an independent auditor least likely to do with respect to a company's financial statements?
Responda
-
Prepare and accept responsibility for them.
-
Provide an opinion concerning their fairness and reliability.
-
Confirm assets and liabilities contained in them.
Questão 38
Questão
A listing of all the firm's journal entries by date is called the:
Responda
-
adjusted trial balance.
-
general ledger.
-
general journal.
Questão 39
Questão
In addition to the audited financial statements included in a firm's annual report, which of the following sources of information is
most likely to contain audited data?
Questão 40
Questão
Which of the following is a company least likely required to present according to International Accounting Standard (IAS) No.
1?
Responda
-
Statement of changes in owners' equity.
-
A summary of accounting policies.
-
Disclosures of material events.
Questão 41
Questão
An analyst is least likely to use disclosures of accounting policies and estimates to evaluate:
Responda
-
whether the disclosures have changed since the prior period.
-
what policies are likely to be modified in future periods.
-
what policies are discussed.
Questão 42
Questão
According to the IASB Conceptual Framework for Financial Reporting, one of the qualitative characteristics of financial
statements is:
Responda
-
going concern.
-
faithful representation.
-
timeliness.
Questão 43
Questão
The best description of the general ledger is that it:
Responda
-
groups accounts into the categories that are presented in the financial
statements.
-
is where journal entries are first recorded.
-
sorts the entries in the general journal by account.
Questão 44
Questão
A company's chart of accounts is:
Responda
-
the set of journal entries that makes up the components of owners' equity.
-
a detailed list of the accounts that make up the five financial statement elements
-
used for entries that offset other accounts.
Questão 45
Questão
The term "convergence" is most accurately used to describe:
Responda
-
the reduction of the premium on a bond as it nears maturity.
-
the process of developing one universally accepted set of accounting standards.
-
when expected return and required return are equal.
Questão 46
Questão
Which of the following is least likely a qualitative characteristic accounting information must possess in order to provide useful
information to an analyst, according to the IASB Conceptual Framework?
Responda
-
Faithful representation.
-
Relevance.
-
Conservatism.
Questão 47
Questão
Which of the following is the best description of the flow of information in an accounting system?
Responda
-
Journal entries, general ledger, trial balance, financial statements.
-
Trial balance, general ledger, general journal, financial statements.
-
General ledger, trial balance, general journal, financial statements.
Questão 48
Questão
A furniture store acquires a set of chairs for $750 cash and sells them for $1000 cash. These transactions are most likely to
affect which accounts?
Purchase Sale
Responda
-
Assets only Assets, revenue, expenses, owners' equity
-
Assets and expenses Assets, revenue, expenses, owners' equity
-
Assets only Assets and revenues only
Questão 49
Questão
Disagreements that inhibit development of a coherent financial reporting framework are least likely to involve which of the
following?
Responda
-
Standard setting.
-
Transparency.
-
Valuation.
Questão 50
Questão
Which of the following statements regarding footnotes to the financial statements is least accurate?
Responda
-
Footnotes may contain information regarding contingent losses.
-
Footnotes provide information about assumptions and estimates used by
management.
-
Some supplementary schedules are audited whereas footnotes are not audited.
Questão 51
Questão
Which of the following is least likely to be considered a characteristic of a coherent financial reporting framework?
Responda
-
Transparency.
-
Stability.
-
Comprehensiveness.
Questão 52
Questão
The step in the financial statement analysis framework that includes making any appropriate adjustments to the financial
statements and calculating ratios is best described as:
Questão 53
Questão
A company's operating revenues for a reporting period are most likely to be shown on its:
Responda
-
cash flow statement.
-
balance sheet.
-
income statement.
Questão 54
Questão
Two underlying assumptions of financial statements, according to the IASB conceptual framework, are:
Responda
-
going concern and accrual accounting.
-
accrual accounting and historical cost.
-
historical cost and going concern.
Questão 55
Questão
Which of the following best describes financial reporting and financial statement analysis?
Responda
-
Financial reporting refers to how companies show their financial performance
and financial analysis refers to using the information to make economic
decisions.
-
The objective of financial analysis is to provide information about the financial position
of an entity that is useful to a wide range of users.
-
Financial reports assess a company's past performance in order to draw conclusions
about the company's ability to generate cash and profits in the future.
Questão 56
Questão
The purchase of equipment for $25,000 cash is most likely to be recorded as:
Responda
-
an increase in an asset account and an increase in a liability account.
-
an increase in one asset account and a decrease in another asset account.
-
an increase in two asset accounts.
Questão 57
Questão
An analyst can find a company's accounting policies that require significant judgement or estimates in:
Questão 58
Questão
Which of the following least accurately describes a correct use of doubleentry
accounting?
Responda
-
A decrease in a liability account may be balanced by a decrease in another
liability account.
-
A transaction may be recorded in more than two accounts.
-
An increase in an asset account may be balanced by an increase in an owner's equity
account.
Questão 59
Questão
Under which framework for financial reporting systems are the financial statement elements related to performance defined as
revenues, expenses, gains, losses, and comprehensive income?
Questão 60
Questão
The step in the financial statement analysis framework of "processing the data" is least likely to include which activity?
Responda
-
Making appropriate adjustments to the financial statements.
-
Acquiring the company's financial statements.
-
Preparing exhibits such as graphs.
Questão 61
Questão
Which description of the objective of financial statements is most accurate? The objective of financial statements is:
Responda
-
to provide a wide range of users with information about a firm's financial
prospects.
-
to provide economic decision makers with useful information about a firm's financial
performance and changes in financial position.
to provide securities analysts with objective data about
-
to provide securities analysts with objective data about a firm's financial prospects.
Questão 62
Questão
Sergey Martinenko is an investment analyst with Profis, Martinenko and Verona. He is explaining to his new assistant, John
Stevenson, why it is crucial for an investment analyst to read the footnotes to a firm's financial statement and the Management
Discussion and Analysis (MD&A) before making an investment decision. Which rationale is Martinenko least likely to provide to
Stevenson regarding the importance of analyzing the footnotes and MD&A?
Responda
-
The footnotes disclose whether or not the company is adhering to GAAP.
-
Evaluating the footnotes helps the analyst assess whether management is
manipulating earnings.
-
Accruals, adjustments and assumptions are often explained in the footnotes and
MD&A.
Questão 63
Questão
According to the IFRS framework, timeliness is a characteristic that enhances:
Questão 64
Questão
Which of the following is least likely to be considered a stated goal of the International Accounting Standards Board (IASB)?
Responda
-
Develop global accounting standards requiring transparency, comparability,
and high quality in financial statements.
-
Remain neutral in the debate on the use of global accounting standards to avoid
appearance of a conflict of interest.
-
Account for the needs of emerging markets and small firms when implementing global
accounting standards.
Questão 65
Questão
Regarding the use of financial statements in security analysis and selection, it would be most accurate to say that:
Responda
-
analysts can verify the accuracy of financial statements by using a firm's
detailed accounting system information.
-
further analysis of a firm's financial statements is typically not necessary if the firm has
conformed to applicable accounting principles.
-
analysts can use footnotes and Management's Discussion and Analysis to better
understand assumptions used in the financial statements.
Questão 66
Questão
Which of the following is most likely to be considered a barrier to developing one universally recognized set of reporting
standards?
Responda
-
Reluctance of firms to adhere to a single set of reporting standards.
-
Different standardsetting
bodies of different countries disagree on the best treatment
of a particular issue.
-
GATT already requires sufficient agreement.
Questão 67
Questão
Which of the following is the best description of the financial statement analysis framework?
Responda
-
State the objective and context, gather data, process the data, analyze and
interpret the data, report the conclusions or recommendations, update the
analysis.
-
Gather data, analyze and interpret the data, determine the context, report the
conclusions, update the analysis.
-
Gather data, analyze and interpret the data, process the conclusions, assess the
context, report the recommendations, update the analysis.
Questão 68
Questão
Required financial statements, according to International Accounting Standard (IAS) No. 1, include a(n):
Responda
-
balance sheet and explanatory notes.
-
cash flow statement and auditor's report.
-
income statement and working capital summary.
Questão 69
Questão
The following amounts were drawn from the records of JME Company: total assets = $1,200; total liabilities = $750;
contributed capital = $600. Based on this information alone, retained earnings must be equal to:
Questão 70
Questão
The standard auditor's report is most likely required to:
Responda
-
provide reasonable assurance that management is reliable.
-
provide an "unqualified" opinion if material uncertainties exist.
-
provide reasonable assurance that the financial statements contain no material errors.
Questão 71
Questão
Which of the following statements about financial reporting standards is least accurate? Reporting standards:
Responda
-
narrow the range within which management estimates can be seen as
reasonable.
-
are disclosed on Form 8K by publicly traded firms in the United States.
-
ensure that the information is "useful to a wide range of users."
Questão 72
Questão
Which of the following statements concerning the notes to the audited financial statements of a company is least accurate?
Financial statement notes:
Questão 73
Questão
Desirable attributes of accounting standardsetting
bodies least likely include:
Responda
-
making decisions that are in the public interest.
-
operating independently of interested stakeholders.
-
having clear and consistent standardsetting
processes.
Questão 74
Questão
Which of the following is least likely to be available on EDGAR (Electronic Data Gathering, Analysis, and Retrieval System)?
Questão 75
Questão
The process of developing one universally accepted set of accounting standards is best described as:
Responda
-
unification.
-
convergence.
-
IASB.
Questão 76
Questão
Which of the following statements about the elements of financial statements under the FASB and IASB frameworks is least
accurate?
Responda
-
The IASB framework lists income and expenses as the elements related to
performance.
-
The IASB framework does not allow the values of assets to be adjusted upward.
-
The word "probable" is used by the FASB to define assets and liabilities.