Test_BankFinancial_Reporting,Financial_Statement_Ana lysis j
_and_Valuation
MULTIPLEjCHOICE
1. Thejtoolsjforjstudyingjindustryjeconomicsjdoesjnotjinclude:
a. Valuejchainjanalysis
b. ClassificationjusingjPorter’sjfivejforces
c. Classificationjofjcashjflows
d. Economicjattributesjframework
ANS: C PTS: 1
2. Whichjofjthejfollowingjisjajquestionjanjanalystjwouldjaskjwhenjassessingjthejqualityjofjajfirm’sjfinancialjsta
tements?
a. Arejthejcompany’sjproductsjdesignedjtojmeetjajspecificjmarketjsegment?
b. Hasjthejfirmjintegratedjforwardjintojretailingjtojfinaljconsumers?
c. Isjthejfirmjdiversifiedjacrossjseveraljgeographicaljmarkets?
d. Dojearningsjincludejnonrecurringjgainsjorjlosses?
ANS: D PTS: 1
3. Whichjofjthejfollowingjeconomicjcharacteristicsjisjconsistentjwithjajgroceryjstorejchain?
a. Minimaljcompetition
b. Extensivejcompetition
c. Highjnetjincomejtojsales
d. Differentiatedjproduct
, ANS: B PTS: 1
4. Onjajcommonjsizejbasis,jwhichjofjthejfollowingjassetsjisjnormallyjlargestjforjanjelectricjutility?
a. Accountsjreceivable
b. Inventory
c. Property,jPlantjandjEquipment
d. CashjandjMarketablejSecurities
ANS: C PTS: 1
5. Onjajcommonjsizejbasis,jwhichjofjthejfollowingjassetsjisjnormallyjlargestjforjajcommercialjbank?
a. AccountsjandjNotesjReceivable
b. Inventory
c. Property,jPlantjandjEquipment
d. CashjandjMarketablejSecurities
ANS: A PTS: 1
6. WhichjofjthejfollowingjisjnotjonejofjPorter’sjfivejforces?
a. BuyerjPower
b. SupplierjPower
c. ThreatjofjRegulation
d. ThreatjofjSubstitutes
ANS: C PTS: 1
7. WhenjassessingjbuyerjpowerjusingjPorter’sjfivejforces,jwhichjofjthejfollowingjisjnotjconsistentjwithjlowjbu
yerjpower?
, a. Brandjloyalty
b. Controljofjdistributionjchannel
c. Largejnumberjofjsuppliers
d. Lowjprice
ANS: C PTS: 1
8. Thejsecondjstepjinjfinancialjstatementjanalysisjisjtojidentifyjthejcompanyjstrategy.jWhichjofjthejfol
lowingjisjajquestionjanjanalystjshouldjaskjwhenjperformingjajstrategyjanalysis?
a. Arejindustryjsalesjgrowingjrapidlyjorjslowly?
b. Dojearningsjincludejrevenuesjthatjappearjmismatchedjwithjthejbusinessjmodelje
mployedjbyjthejfirm?
c. Doesjthejindustryjincludejajlargejnumberjofjfirmsjsellingjsimilarjproducts?
d. Whatjisjthejcompany’sjdegreejofjgeographicaljdiversification?
ANS: D PTS: 1
9. Thejthirdjstepjinjfinancialjstatementjanalysisjisjtojassessjthejqualityjofjthejfirm’sjfinancialjstatements.jW
hichjofjthejfollowingjisjajquestionjanjanalystjshouldjaskjwhenjperformingjthisjstep?
a. Arejindustryjsalesjgrowingjrapidlyjorjslowly?
b. Dojearningsjincludejrevenuesjthatjappearjmismatchedjwithjthejbusinessjmodelje
mployedjbyjthejfirm?
c. Doesjthejindustryjincludejajlargejnumberjofjfirmsjsellingjsimilarjproducts?
d. Whatjisjthejcompany’sjdegreejofjgeographicaljdiversification?
ANS: B PTS: 1
10. Anjexamplejofjanjintangiblejassetjis:
a. Ajpatent
, b. Land
c. Investmentjinjanotherjcompany
d. Rawjmaterialjinventory
ANS: A PTS: 1
11. Whichjofjthejfollowingjwouldjnotjappearjasjajliabilityjonjthejbalancejsheet?
a. Ajlaborjcontract
b. Ajnotejduejtojajbank
c. Salaryjduejemployeesjatjyear-end
d. Accountsjpayable
ANS: A PTS: 1
12. Whichjofjthejfollowingjassetsjwouldjappearjonjthejbalancejsheetjatjanjamountjgreatlyjbelowjitsjfairjma
rketjvalue?
a. Inventory
b. Marketablejsecurities
c. Equipment
d. Brandjname
ANS: D PTS: 1
13. Thejaccrualjbasisjofjaccountingjrecognizes:
a. Revenuejwhenjcashjisjreceivedjfromjcustomers
b. Expensesjwhenjpaid
c. Revenuejwhenjalljorjajsubstantialjportionjisjperformed
d. Revenuejwhenjcontractsjarejsigned
_and_Valuation
MULTIPLEjCHOICE
1. Thejtoolsjforjstudyingjindustryjeconomicsjdoesjnotjinclude:
a. Valuejchainjanalysis
b. ClassificationjusingjPorter’sjfivejforces
c. Classificationjofjcashjflows
d. Economicjattributesjframework
ANS: C PTS: 1
2. Whichjofjthejfollowingjisjajquestionjanjanalystjwouldjaskjwhenjassessingjthejqualityjofjajfirm’sjfinancialjsta
tements?
a. Arejthejcompany’sjproductsjdesignedjtojmeetjajspecificjmarketjsegment?
b. Hasjthejfirmjintegratedjforwardjintojretailingjtojfinaljconsumers?
c. Isjthejfirmjdiversifiedjacrossjseveraljgeographicaljmarkets?
d. Dojearningsjincludejnonrecurringjgainsjorjlosses?
ANS: D PTS: 1
3. Whichjofjthejfollowingjeconomicjcharacteristicsjisjconsistentjwithjajgroceryjstorejchain?
a. Minimaljcompetition
b. Extensivejcompetition
c. Highjnetjincomejtojsales
d. Differentiatedjproduct
, ANS: B PTS: 1
4. Onjajcommonjsizejbasis,jwhichjofjthejfollowingjassetsjisjnormallyjlargestjforjanjelectricjutility?
a. Accountsjreceivable
b. Inventory
c. Property,jPlantjandjEquipment
d. CashjandjMarketablejSecurities
ANS: C PTS: 1
5. Onjajcommonjsizejbasis,jwhichjofjthejfollowingjassetsjisjnormallyjlargestjforjajcommercialjbank?
a. AccountsjandjNotesjReceivable
b. Inventory
c. Property,jPlantjandjEquipment
d. CashjandjMarketablejSecurities
ANS: A PTS: 1
6. WhichjofjthejfollowingjisjnotjonejofjPorter’sjfivejforces?
a. BuyerjPower
b. SupplierjPower
c. ThreatjofjRegulation
d. ThreatjofjSubstitutes
ANS: C PTS: 1
7. WhenjassessingjbuyerjpowerjusingjPorter’sjfivejforces,jwhichjofjthejfollowingjisjnotjconsistentjwithjlowjbu
yerjpower?
, a. Brandjloyalty
b. Controljofjdistributionjchannel
c. Largejnumberjofjsuppliers
d. Lowjprice
ANS: C PTS: 1
8. Thejsecondjstepjinjfinancialjstatementjanalysisjisjtojidentifyjthejcompanyjstrategy.jWhichjofjthejfol
lowingjisjajquestionjanjanalystjshouldjaskjwhenjperformingjajstrategyjanalysis?
a. Arejindustryjsalesjgrowingjrapidlyjorjslowly?
b. Dojearningsjincludejrevenuesjthatjappearjmismatchedjwithjthejbusinessjmodelje
mployedjbyjthejfirm?
c. Doesjthejindustryjincludejajlargejnumberjofjfirmsjsellingjsimilarjproducts?
d. Whatjisjthejcompany’sjdegreejofjgeographicaljdiversification?
ANS: D PTS: 1
9. Thejthirdjstepjinjfinancialjstatementjanalysisjisjtojassessjthejqualityjofjthejfirm’sjfinancialjstatements.jW
hichjofjthejfollowingjisjajquestionjanjanalystjshouldjaskjwhenjperformingjthisjstep?
a. Arejindustryjsalesjgrowingjrapidlyjorjslowly?
b. Dojearningsjincludejrevenuesjthatjappearjmismatchedjwithjthejbusinessjmodelje
mployedjbyjthejfirm?
c. Doesjthejindustryjincludejajlargejnumberjofjfirmsjsellingjsimilarjproducts?
d. Whatjisjthejcompany’sjdegreejofjgeographicaljdiversification?
ANS: B PTS: 1
10. Anjexamplejofjanjintangiblejassetjis:
a. Ajpatent
, b. Land
c. Investmentjinjanotherjcompany
d. Rawjmaterialjinventory
ANS: A PTS: 1
11. Whichjofjthejfollowingjwouldjnotjappearjasjajliabilityjonjthejbalancejsheet?
a. Ajlaborjcontract
b. Ajnotejduejtojajbank
c. Salaryjduejemployeesjatjyear-end
d. Accountsjpayable
ANS: A PTS: 1
12. Whichjofjthejfollowingjassetsjwouldjappearjonjthejbalancejsheetjatjanjamountjgreatlyjbelowjitsjfairjma
rketjvalue?
a. Inventory
b. Marketablejsecurities
c. Equipment
d. Brandjname
ANS: D PTS: 1
13. Thejaccrualjbasisjofjaccountingjrecognizes:
a. Revenuejwhenjcashjisjreceivedjfromjcustomers
b. Expensesjwhenjpaid
c. Revenuejwhenjalljorjajsubstantialjportionjisjperformed
d. Revenuejwhenjcontractsjarejsigned
