Question 1

Which of the following economic characteristics is consistent with a grocery store chain?

Accepted Answer

A)  Low barriers to entry. 
B)  High levels of research and development. 
C)  High profit margins. 
D)  Low capital intensity. 
A)  Low barriers to entry. 
B)  High levels of research and development. 
C)  High profit margins. 
D)  Low capital intensity.

Question 2

All of the following are the building blocks for financial statement analysis except:

Accepted Answer

A)  Targeting growth opportunities that diversify exchange rates, risk exposure, and political uncertainty. 
B)  Describing strategies that a firm pursues to differentiate itself from competitors in order to evaluate competitive advantages, sustainability of the firm's earnings, and its risks. 
C)  Evaluating the financial statements, including the accounting concepts and methods that underlie them and the quality of the information they provide. 
D)  Identification of the economic characteristics of the industries and the relation of those economic characteristics to the various financial statement ratios. 
A)  Targeting growth opportunities that diversify exchange rates, risk exposure, and political uncertainty. 
B)  Describing strategies that a firm pursues to differentiate itself from competitors in order to evaluate competitive advantages, sustainability of the firm's earnings, and its risks. 
C)  Evaluating the financial statements, including the accounting concepts and methods that underlie them and the quality of the information they provide. 
D)  Identification of the economic characteristics of the industries and the relation of those economic characteristics to the various financial statement ratios.

Question 3

The accrual basis method of accounting can be best described as:

Accepted Answer

A)  The recording of transactions and adjustments so that debits equal credits. 
B)  The method that equates assets with liabilities and owners' equity. 
C)  The method that recognizes revenue when money is received. 
D)  The method that matches incurred expenses with related revenues when they are earned. 
A)  The recording of transactions and adjustments so that debits equal credits. 
B)  The method that equates assets with liabilities and owners' equity. 
C)  The method that recognizes revenue when money is received. 
D)  The method that matches incurred expenses with related revenues when they are earned.

Question 4

An example of an intangible asset is

Accepted Answer

A)  a patent 
B)  land 
C)  investment in another company 
D)  raw material inventory 
A)  a patent 
B)  land 
C)  investment in another company 
D)  raw material inventory

Question 5

Extraordinary gains and losses arise from events that have all the following characteristics except:

Accepted Answer

A)  they are unusual given the nature of the firm's activity. 
B)  they are nonrecurring. 
C)  they are material in amount. 
D)  they result from terminated involvement in a line of business. 
A)  they are unusual given the nature of the firm's activity. 
B)  they are nonrecurring. 
C)  they are material in amount. 
D)  they result from terminated involvement in a line of business.

Question 6

The ______________________________ sets forth the sequence of activities involved in the creation,manufacture and distribution of its products and services.

Accepted Answer

The answer of The ______________________________ sets forth the sequence of...

Question 7

The five economic attributes that are normally studied are demand,supply,manufacturing,____________________,and investing and financing.

Accepted Answer

The answer of The five economic attributes that are normally...

Question 8

The residual interest in a company is referred to as ______________________________.

Accepted Answer

shareholde

Question 9

The following steps make up the steps in financial statement analysis. 1.Identify the strategies the firm pursues to gain and sustain a competitive advantage.
2)Analyze the current profitability and risk of the firm using information in the
Financial statements.
3)Value the firm.
4)Identify the economic characteristics and competitive dynamics of the industry in
Which a particular firm participates.
5)Assess the quality of the firm's financial statements and,if necessary,adjust them for
Such desirable characteristics as sustainability or comparability.
6)Prepare forecasted financial statements.
Which of the following is the proper order for these interrelated sequential steps?

Accepted Answer

A)  4,1,5,2,6,3 
B)  1,2,3,4,5,6 
C)  1,4,2,5,6,3 
D)  1,4,2,5,3,6 
A)  4,1,5,2,6,3 
B)  1,2,3,4,5,6 
C)  1,4,2,5,6,3 
D)  1,4,2,5,3,6

Question 10

The accrual basis of accounting recognizes

Accepted Answer

A)  revenue when cash is received from customers 
B)  expenses when paid 
C)  revenue when all or a substantial portion is performed 
D)  revenue when contracts are signed 
A)  revenue when cash is received from customers 
B)  expenses when paid 
C)  revenue when all or a substantial portion is performed 
D)  revenue when contracts are signed

Question 11

The fourth step in financial statement analysis is using the financial statements to analyze the current ____________________ and ____________________ of the firm.

Accepted Answer

profitabil

Question 12

The following selected financial data pertain to four companies: a hotel,a travel agency,a meat packing company and a pharmaceutical company.
Required: Match each with the financial information and explain why you made your choice as you did.

Accepted Answer

Company 1: Meat packing company (high in

Question 13

Firms intending to issue new bonds or capital stock file a ____________________ with the SEC that describes the offering.

Accepted Answer

The answer of Firms intending to issue new bonds or...

Question 14

Which of the following activities reported in the Statement of Cash Flows is not a financing activity?

Accepted Answer

A)  Repayment of outstanding debt. 
B)  Investing in equity securities of other companies. 
C)  Payment of dividends. 
D)  Issuing debt. 
A)  Repayment of outstanding debt. 
B)  Investing in equity securities of other companies. 
C)  Payment of dividends. 
D)  Issuing debt.

Question 15

Basic EPS is calculated as net income minus _____________________________________________ divided by the weighted average number of shares outstanding.
dividends on preferred stock

Accepted Answer

dividends

Question 16

The tools for studying industry economics do not include

Accepted Answer

A)  Value chain analysis 
B)  Classification using Porter's five forces 
C)  Classification of cash flows 
D)  Economic attributes framework 
A)  Value chain analysis 
B)  Classification using Porter's five forces 
C)  Classification of cash flows 
D)  Economic attributes framework

Question 17

Comparative financial statements for Larson Company,prepared on December 31 are shown below:
   Required:
Assume that one-third of sales are on credit and that cash dividends of $3,000 were declared and paid in 2012.Then,complete a percentage change income statement and a percentage change balance sheet for the company,using both amount and percentage changes from 2011 to 2012.

Accepted Answer

The answer of Comparative financial statements for Larson Company,prepared on...

Question 18

The higher the value added from any activity,the higher should be the ____________________ from engaging in that activity.

Accepted Answer

The answer of The higher the value added from any...

Question 19

Resources that have the potential for providing a firm with future economic benefits are called ____________________.

Accepted Answer

The answer of Resources that have the potential for providing...

Question 20

Prepare an analysis of the automobile manufacturing industry using Porter's five forces framework.For each component force provide support for your conclusion.In addition,at the completion of your analysis provide a conclusion,along with support,of whether you expect the automobile industry to report high or low profitability in the near future.

Accepted Answer

Buyer Power--HIGH--It appears that consu

Which of the following economic characteristics is consistent with a grocery store chain?

All of the following are the building blocks for financial statement analysis except:

The accrual basis method of accounting can be best described as:

An example of an intangible asset is

Extraordinary gains and losses arise from events that have all the following characteristics except:

The ______________________________ sets forth the sequence of activities involved in the creation,manufacture and distribution of its products and services.

The five economic attributes that are normally studied are demand,supply,manufacturing,____________________,and investing and financing.

The residual interest in a company is referred to as ______________________________.

The accrual basis of accounting recognizes

The fourth step in financial statement analysis is using the financial statements to analyze the current and of the firm.

The following selected financial data pertain to four companies: a hotel,a travel agency,a meat packing company and a pharmaceutical company. Required: Match each with the financial information and explain why you made your choice as you did.

Firms intending to issue new bonds or capital stock file a ____________________ with the SEC that describes the offering.

Which of the following activities reported in the Statement of Cash Flows is not a financing activity?

Basic EPS is calculated as net income minus _____________________________________________ divided by the weighted average number of shares outstanding. dividends on preferred stock

The tools for studying industry economics do not include

The higher the value added from any activity,the higher should be the ____________________ from engaging in that activity.

Resources that have the potential for providing a firm with future economic benefits are called ____________________.

Asset and Liability Valuation and Income Measurement

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Financing Activities

Investing Activities

Operating Activities

Accounting Quality

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Exam 1: Overview of Financial Reporting, Financial Statement Analysis, and Valuation

Which of the following economic characteristics is consistent with a grocery store chain?

All of the following are the building blocks for financial statement analysis except:

The accrual basis method of accounting can be best described as:

An example of an intangible asset is

Extraordinary gains and losses arise from events that have all the following characteristics except:

The ______________________________ sets forth the sequence of activities involved in the creation,manufacture and distribution of its products and services.

The five economic attributes that are normally studied are demand,supply,manufacturing,____________________,and investing and financing.

The residual interest in a company is referred to as ______________________________.

The accrual basis of accounting recognizes

The fourth step in financial statement analysis is using the financial statements to analyze the current ____________________ and ____________________ of the firm.

The following selected financial data pertain to four companies: a hotel,a travel agency,a meat packing company and a pharmaceutical company. Required: Match each with the financial information and explain why you made your choice as you did.

Firms intending to issue new bonds or capital stock file a ____________________ with the SEC that describes the offering.

Which of the following activities reported in the Statement of Cash Flows is not a financing activity?

Basic EPS is calculated as net income minus _____________________________________________ divided by the weighted average number of shares outstanding. dividends on preferred stock

The tools for studying industry economics do not include

The higher the value added from any activity,the higher should be the ____________________ from engaging in that activity.

Resources that have the potential for providing a firm with future economic benefits are called ____________________.

Asset and Liability Valuation and Income Measurement

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Financing Activities

Investing Activities

Operating Activities

Accounting Quality

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

The fourth step in financial statement analysis is using the financial statements to analyze the current and of the firm.