Question 1

Which of the following is true of a balance sheet?

Accepted Answer

A)  It summarizes the performance of the organization over a specific period of time. 
B)  It supplements information provided by the income statement. 
C)  It shows the financial position of an organization on a specific date. 
D)  It explains some changes in the assets and liabilities of a company between two consecutive periods. 
A)  It summarizes the performance of the organization over a specific period of time. 
B)  It supplements information provided by the income statement. 
C)  It shows the financial position of an organization on a specific date. 
D)  It explains some changes in the assets and liabilities of a company between two consecutive periods.

Question 2

Which of the following is a fundamental accounting principle?

Accepted Answer

A)  price principle 
B)  objectivity principle 
C)  subjectivity principle 
D)  conformity principle 
A)  price principle 
B)  objectivity principle 
C)  subjectivity principle 
D)  conformity principle

Question 3

Personal balance sheet provides a snapshot of an individual's financial condition at a specific point in time.

Accepted Answer

A) True 
 B)False

Question 4

The income statement explains all changes in the assets,liabilities,and equity of a company between two consecutive balance sheet dates.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is one of Michael Porter's five competitive forces?

Accepted Answer

A)  the bargaining power of suppliers 
B)  the bargaining power of the government 
C)  the threat of industrial slowdown 
D)  the threat of technological obsolescence 
A)  the bargaining power of suppliers 
B)  the bargaining power of the government 
C)  the threat of industrial slowdown 
D)  the threat of technological obsolescence

Question 6

Financial statements rarely,if ever,represent economic reality.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a difference between a forensic accountant and an accountant or auditor?

Accepted Answer

A)  A forensic accountant works with complete information, whereas an accountant or auditor works with incomplete information. 
B)  A forensic accountant commonly works backward, whereas an accountant or auditor typically works forward. 
C)  A forensic accountant works with financial ratios, whereas an accountant or auditor works with internal reports. 
D)  A forensic accountant uses professional skepticism while conducting the analysis, whereas an accountant or auditor has a more open mindset. 
A)  A forensic accountant works with complete information, whereas an accountant or auditor works with incomplete information. 
B)  A forensic accountant commonly works backward, whereas an accountant or auditor typically works forward. 
C)  A forensic accountant works with financial ratios, whereas an accountant or auditor works with internal reports. 
D)  A forensic accountant uses professional skepticism while conducting the analysis, whereas an accountant or auditor has a more open mindset.

Question 8

Which of the following is true of Altman's Z-Score Boundaries?

Accepted Answer

A)  If a publicly traded non-manufacturing firm has a Z-score of 1.81, it predicts bankruptcy. 
B)  If a publicly traded manufacturing firm has a Z-score of 2.60, it indicates non-bankruptcy. 
C)  If a publicly traded manufacturing firm has a Z-score of 1.42, the firm is in the zone of ignorance. 
D)  The zone of ignorance for privately held manufacturing firms is 1.23 to 2.90. 
A)  If a publicly traded non-manufacturing firm has a Z-score of 1.81, it predicts bankruptcy. 
B)  If a publicly traded manufacturing firm has a Z-score of 2.60, it indicates non-bankruptcy. 
C)  If a publicly traded manufacturing firm has a Z-score of 1.42, the firm is in the zone of ignorance. 
D)  The zone of ignorance for privately held manufacturing firms is 1.23 to 2.90.

Question 9

Explain the matching principle.

Accepted Answer

A major objective of accounting is the d

Question 10

As per the research conducted by Churyk and Clinton,significantly fewer colons in the management discussion and analysis section of annual reports are an indication of financial statement deception.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true of financial statements?

Accepted Answer

A)  They represent historical data. 
B)  They are prepared for management purposes. 
C)  They represent future estimates of the firm. 
D)  They provide a reasonable level of assurance to their users. 
A)  They represent historical data. 
B)  They are prepared for management purposes. 
C)  They represent future estimates of the firm. 
D)  They provide a reasonable level of assurance to their users.

Question 12

Research conducted by Churyk and Clinton (2008)identified certain "tells" or communication characteristics in the context of the management discussion and analysis section of annual reports,related to financial statement deception.Which of the following characteristics is an indicator of such deception?

Accepted Answer

A)  fewer words per sentences 
B)  fewer past-tense words 
C)  more optimistic words 
D)  more self-references 
A)  fewer words per sentences 
B)  fewer past-tense words 
C)  more optimistic words 
D)  more self-references

Question 13

Which of the following accountants use a conservative reporting strategy?

Accepted Answer

A)  Imogene reported a higher inventory than actual. 
B)  Malik understated the expense incurred during the year. 
C)  Lia capitalized the general maintenance expenses. 
D)  Yuriko used a higher depreciation rate for the assets. 
A)  Imogene reported a higher inventory than actual. 
B)  Malik understated the expense incurred during the year. 
C)  Lia capitalized the general maintenance expenses. 
D)  Yuriko used a higher depreciation rate for the assets.

Question 14

Internal and external comparisons,made during financial statement analysis,can reveal unexpected relationships or the absence of expected relationships.

Accepted Answer

A) True 
 B)False

Question 15

Content analysis is a quantitative method of determining characteristics of interest.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is true of a personal balance sheet?

Accepted Answer

A)  It provides a snapshot of an individual's financial condition at a specific point in time. 
B)  It reflects the historical cost of assets and the estimated current amounts of liabilities. 
C)  It is prepared by the manager for the personal use of the company. 
D)  It is prepared by a company for individual investors to reflect the data required by them. 
A)  It provides a snapshot of an individual's financial condition at a specific point in time. 
B)  It reflects the historical cost of assets and the estimated current amounts of liabilities. 
C)  It is prepared by the manager for the personal use of the company. 
D)  It is prepared by a company for individual investors to reflect the data required by them.

Question 17

Judith Corp.has current assets worth $50,000 and current liabilities worth $75,000.Current assets include inventory of $10,000.Calculate current ratio.

Accepted Answer

A)  1.500 
B)  0.533 
C)  0.625 
D)  0.667 
A)  1.500 
B)  0.533 
C)  0.625 
D)  0.667

Question 18

In which of the following aspects does audit differ from compilation or review?

Accepted Answer

A)  An audit gives reasonable level of assurance to the users, whereas a compilation or review does not give any level of assurance to the users. 
B)  An audit requires an understanding of the entity's internal controls and assessment of fraud risk, whereas a compilation or review does not require such understanding or assessment. 
C)  An audit requires an auditor or accountant to perform inquiry and analytical procedures, whereas a compilation or review does not require such procedures. 
D)  An audit is performed to obtain limited assurance that there are no material modifications that should be made to the financial statements, whereas a compilation or review is performed without obtaining any level of assurance. 
A)  An audit gives reasonable level of assurance to the users, whereas a compilation or review does not give any level of assurance to the users. 
B)  An audit requires an understanding of the entity's internal controls and assessment of fraud risk, whereas a compilation or review does not require such understanding or assessment. 
C)  An audit requires an auditor or accountant to perform inquiry and analytical procedures, whereas a compilation or review does not require such procedures. 
D)  An audit is performed to obtain limited assurance that there are no material modifications that should be made to the financial statements, whereas a compilation or review is performed without obtaining any level of assurance.

Question 19

Which of the following is a systematic technique for categorizing words into content categories using special coding rules?

Accepted Answer

A)  DuPont analysis 
B)  content analysis 
C)  Altman's Z-score 
D)  content coding 
A)  DuPont analysis 
B)  content analysis 
C)  Altman's Z-score 
D)  content coding

Question 20

Which of the following is true of the compound annual growth rate?

Accepted Answer

A)  It reflects average annual growth over a period of multiple years. 
B)  It reflects total annual growth over a period of multiple years. 
C)  It reflects average annual growth for a year as compared to the previous year. 
D)  It reflects total annual growth for a year as compared to the previous year. 
A)  It reflects average annual growth over a period of multiple years. 
B)  It reflects total annual growth over a period of multiple years. 
C)  It reflects average annual growth for a year as compared to the previous year. 
D)  It reflects total annual growth for a year as compared to the previous year.

Which of the following is true of a balance sheet?

Which of the following is a fundamental accounting principle?

Personal balance sheet provides a snapshot of an individual's financial condition at a specific point in time.

The income statement explains all changes in the assets,liabilities,and equity of a company between two consecutive balance sheet dates.

Which of the following is one of Michael Porter's five competitive forces?

Financial statements rarely,if ever,represent economic reality.

Which of the following is a difference between a forensic accountant and an accountant or auditor?

Which of the following is true of Altman's Z-Score Boundaries?

Explain the matching principle.

As per the research conducted by Churyk and Clinton,significantly fewer colons in the management discussion and analysis section of annual reports are an indication of financial statement deception.

Which of the following is true of financial statements?

Which of the following accountants use a conservative reporting strategy?

Internal and external comparisons,made during financial statement analysis,can reveal unexpected relationships or the absence of expected relationships.

Content analysis is a quantitative method of determining characteristics of interest.

Which of the following is true of a personal balance sheet?

Judith Corp.has current assets worth $50,000 and current liabilities worth $75,000.Current assets include inventory of $10,000.Calculate current ratio.

In which of the following aspects does audit differ from compilation or review?

Which of the following is a systematic technique for categorizing words into content categories using special coding rules?

Which of the following is true of the compound annual growth rate?

Introduction to the World of Forensic Accounting

The Legal Environment of Forensic Accounting

Screening and Staging Engagements

Gathering Evidence Interviews and Observations

Fraud and White-Collar Crime

Conducting a Fraud Investigation

Transforming Data Into Evidence

Transforming Data Into Evidence

Professional Responsibilities

Fundamentals of Business Valuation

Special Topics

Filters

Exam 5: Financial Statements Analysis Reading Between the Lines

Which of the following is true of a balance sheet?

Which of the following is a fundamental accounting principle?

Personal balance sheet provides a snapshot of an individual's financial condition at a specific point in time.

The income statement explains all changes in the assets,liabilities,and equity of a company between two consecutive balance sheet dates.

Which of the following is one of Michael Porter's five competitive forces?

Financial statements rarely,if ever,represent economic reality.

Which of the following is a difference between a forensic accountant and an accountant or auditor?

Which of the following is true of Altman's Z-Score Boundaries?

Explain the matching principle.

As per the research conducted by Churyk and Clinton,significantly fewer colons in the management discussion and analysis section of annual reports are an indication of financial statement deception.

Which of the following is true of financial statements?

Which of the following accountants use a conservative reporting strategy?

Internal and external comparisons,made during financial statement analysis,can reveal unexpected relationships or the absence of expected relationships.

Content analysis is a quantitative method of determining characteristics of interest.

Which of the following is true of a personal balance sheet?

Judith Corp.has current assets worth $50,000 and current liabilities worth $75,000.Current assets include inventory of $10,000.Calculate current ratio.

In which of the following aspects does audit differ from compilation or review?

Which of the following is a systematic technique for categorizing words into content categories using special coding rules?

Which of the following is true of the compound annual growth rate?

Introduction to the World of Forensic Accounting

The Legal Environment of Forensic Accounting

Screening and Staging Engagements

Gathering Evidence Interviews and Observations

Fraud and White-Collar Crime

Conducting a Fraud Investigation

Transforming Data Into Evidence

Transforming Data Into Evidence

Professional Responsibilities

Fundamentals of Business Valuation

Special Topics

Filters