Financial Statement Analysis Final Exam |\ |\ |\ |\ |\
questions with answers |\ |\
What best describes the role of financial statement analysis?
|\ |\ |\ |\ |\ |\ |\ |\
Form expectations about a company's future performance and
|\ |\ |\ |\ |\ |\ |\ |\
financial position. |\
The income statement is best used to evaluate a company's
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
__________
Financial performance. Financial results from business activities.
|\ |\ |\ |\ |\ |\
Unaudited information about significant events and uncertainties
|\ |\ |\ |\ |\ |\ |\
affecting a company's liquidity, capital resources, and results of
|\ |\ |\ |\ |\ |\ |\ |\ |\
operations can be found in what section of public company's
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
filings?
MD&A (management discussion and analysis)
|\ |\ |\ |\
According to the financial statement analysis framework, what is
|\ |\ |\ |\ |\ |\ |\ |\ |\
the first step to take prior to undertaking any analysis?
|\ |\ |\ |\ |\ |\ |\ |\ |\
Articulate the purpose and context of the analysis
|\ |\ |\ |\ |\ |\ |\
Why are the notes that accompany the financial statements
|\ |\ |\ |\ |\ |\ |\ |\ |\
required?
*Provide information necessary to understand the financial
|\ |\ |\ |\ |\ |\ |\
statements
-Support what you put in the financial statements.
|\ |\ |\ |\ |\ |\ |\
-Basis on which they report the information.
|\ |\ |\ |\ |\ |\
Under US GAAP, assets on the balance sheet are generally listed
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
in order of __________
|\ |\ |\
liquidity
, US generally accepted accounting principles (under US GAAP) are
|\ |\ |\ |\ |\ |\ |\ |\
currently developed by which entity?
|\ |\ |\ |\ |\
Financial Accounting Standards Board (FASB) |\ |\ |\ |\
What is the objective of financial reporting?
|\ |\ |\ |\ |\ |\
To provide information useful to users in making decisions about
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
providing resources relating to equity and debt instruments.
|\ |\ |\ |\ |\ |\ |\
The assumption that the effects of transactions and other events
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
are recognized when they occur, not when the cash flows occur,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
is called___________
|\
Accrual basis accounting |\ |\
What does the revenue recognition principle state?
|\ |\ |\ |\ |\ |\
Revenue should be recognized in the period earned independent
|\ |\ |\ |\ |\ |\ |\ |\ |\
of cash flows
|\ |\
During periods of rising prices, which inventory method would
|\ |\ |\ |\ |\ |\ |\ |\ |\
provide the lowest cost of goods sold (COGS) |\ |\ |\ |\ |\ |\ |\
FIFO
Cash received from customers for products to be delivered in the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
future is recorded as: |\ |\ |\
asset and liability |\ |\
Recording of non-cash expenses during a period including |\ |\ |\ |\ |\ |\ |\ |\
depreciation and amortization, warranty expense and allowance |\ |\ |\ |\ |\ |\ |\
for doubtful accounts best represents the which principle?
|\ |\ |\ |\ |\ |\ |\
Matching principle |\
Apple reported different weighted-average shares to compute its
|\ |\ |\ |\ |\ |\ |\ |\
basic and diluted earnings per share on its consolidated
|\ |\ |\ |\ |\ |\ |\ |\ |\
statement of operations for the year ended December 31, 2022. |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
What must be true about the diluted and basic eps.
|\ |\ |\ |\ |\ |\ |\ |\ |\
Basic EPS is higher than its diluted EPS
|\ |\ |\ |\ |\ |\ |\
questions with answers |\ |\
What best describes the role of financial statement analysis?
|\ |\ |\ |\ |\ |\ |\ |\
Form expectations about a company's future performance and
|\ |\ |\ |\ |\ |\ |\ |\
financial position. |\
The income statement is best used to evaluate a company's
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
__________
Financial performance. Financial results from business activities.
|\ |\ |\ |\ |\ |\
Unaudited information about significant events and uncertainties
|\ |\ |\ |\ |\ |\ |\
affecting a company's liquidity, capital resources, and results of
|\ |\ |\ |\ |\ |\ |\ |\ |\
operations can be found in what section of public company's
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
filings?
MD&A (management discussion and analysis)
|\ |\ |\ |\
According to the financial statement analysis framework, what is
|\ |\ |\ |\ |\ |\ |\ |\ |\
the first step to take prior to undertaking any analysis?
|\ |\ |\ |\ |\ |\ |\ |\ |\
Articulate the purpose and context of the analysis
|\ |\ |\ |\ |\ |\ |\
Why are the notes that accompany the financial statements
|\ |\ |\ |\ |\ |\ |\ |\ |\
required?
*Provide information necessary to understand the financial
|\ |\ |\ |\ |\ |\ |\
statements
-Support what you put in the financial statements.
|\ |\ |\ |\ |\ |\ |\
-Basis on which they report the information.
|\ |\ |\ |\ |\ |\
Under US GAAP, assets on the balance sheet are generally listed
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
in order of __________
|\ |\ |\
liquidity
, US generally accepted accounting principles (under US GAAP) are
|\ |\ |\ |\ |\ |\ |\ |\
currently developed by which entity?
|\ |\ |\ |\ |\
Financial Accounting Standards Board (FASB) |\ |\ |\ |\
What is the objective of financial reporting?
|\ |\ |\ |\ |\ |\
To provide information useful to users in making decisions about
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
providing resources relating to equity and debt instruments.
|\ |\ |\ |\ |\ |\ |\
The assumption that the effects of transactions and other events
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
are recognized when they occur, not when the cash flows occur,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
is called___________
|\
Accrual basis accounting |\ |\
What does the revenue recognition principle state?
|\ |\ |\ |\ |\ |\
Revenue should be recognized in the period earned independent
|\ |\ |\ |\ |\ |\ |\ |\ |\
of cash flows
|\ |\
During periods of rising prices, which inventory method would
|\ |\ |\ |\ |\ |\ |\ |\ |\
provide the lowest cost of goods sold (COGS) |\ |\ |\ |\ |\ |\ |\
FIFO
Cash received from customers for products to be delivered in the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
future is recorded as: |\ |\ |\
asset and liability |\ |\
Recording of non-cash expenses during a period including |\ |\ |\ |\ |\ |\ |\ |\
depreciation and amortization, warranty expense and allowance |\ |\ |\ |\ |\ |\ |\
for doubtful accounts best represents the which principle?
|\ |\ |\ |\ |\ |\ |\
Matching principle |\
Apple reported different weighted-average shares to compute its
|\ |\ |\ |\ |\ |\ |\ |\
basic and diluted earnings per share on its consolidated
|\ |\ |\ |\ |\ |\ |\ |\ |\
statement of operations for the year ended December 31, 2022. |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
What must be true about the diluted and basic eps.
|\ |\ |\ |\ |\ |\ |\ |\ |\
Basic EPS is higher than its diluted EPS
|\ |\ |\ |\ |\ |\ |\
