Question 1

Obtaining a competitive advantage by being the first company to introduce new concepts or ideas is referred to as ________________________________________.

Accepted Answer

The answer of Obtaining a competitive advantage by being the...

Question 2

Which of the following is not one of Porter's five forces?

Accepted Answer

A)  Buyer Power 
B)  Supplier Power 
C)  Threat of Regulation 
D)  Threat of Substitutes

Question 3

When assessing the threat of new entrants what questions might an analyst ask about an industry?

Accepted Answer

The answer of When assessing the threat of new entrants...

Question 4

The tools of effective financial statement analysis are also useful for assessing whether to extend ____________________ to a firm,either for a short-term or for a long-term.

Accepted Answer

The answer of The tools of effective financial statement analysis...

Question 5

Which form does the balance sheet equation take in the United Kingdom?

Accepted Answer

A)  Noncurrent Assets + Noncurrent Liabilities = Shareholders' Equity 
B)  Revenues - Expenses = Shareholders' Equity 
C)  Noncurrent Assets + [Current assets - Current Liabilities] - Noncurrent Liabilities = Shareholders' Equity 
D)  Noncurrent Assets - Current assets = Noncurrent Liabilities - Current Liabilities + Shareholders' Equity

Question 6

Which of the following is not an activity reported in the cash flows financial statement?

Accepted Answer

A)  operating 
B)  investing 
C)  manufacturing 
D)  financing

Question 7

Nickel Industries reported the following amounts on its balance sheet on December 31,2011:
  Required:
1.What is the amount of Nickel's total assets at the end of 2011?
2.Identify the items listed above that are liabilities.
3.What is the amount of Nickel's retained earnings at the end of 2011?
4.Prepare a balance sheet for Nickel Industries using U.S.GAAP as of December 31,2011.
5.Nickel Industries wishes to purchase merchandise from your company on account.The amount of the purchases would probably be about $11,000 per month,and the terms would require Nickel to make payment in full within 30 days.Would you recommend that your company grant credit to Nickel under these terms? Explain the reasoning for your response.

Accepted Answer

The answer of Nickel Industries reported the following amounts on...

Question 8

Which financial statement for a business would you look at to determine the company's earnings performance during an accounting period?

Accepted Answer

A)  balance sheet. 
B)  income statement. 
C)  statement of cash flows. 
D)  the Management Assessment.

Question 9

Many people view the balance sheet as being a representation of a firm's economic position.What are some issues that reduce the quality of this representation?

Accepted Answer

The answer of Many people view the balance sheet as...

Question 10

What is the rationale for the statement of cash flows?

Accepted Answer

The answer of What is the rationale for the statement...

Question 11

What are the six interconnected activities related to financial statement analysis?

Accepted Answer

The answer of What are the six interconnected activities related...

Question 12

The _____________________________________________ defines more clearly the explicit responsibility of managers for financial statements,the relation between the independent auditor and the firm audited and the kinds of services permitted and not permitted.

Accepted Answer

The answer of The _____________________________________________ defines more clearly the explicit...

Question 13

On the statement of cash flows,an amount paid for utilities would be classified as

Accepted Answer

A)  a financing activity. 
B)  an operating activity. 
C)  an investing activity. 
D)  a noncash activity.

Question 14

All of the following are reasons that pharmaceutical companies have higher barriers for entry than grocery stores except:

Accepted Answer

A)  There is lengthy government testing and approval required. 
B)  Research and development is a lengthy and uncertain process. 
C)  Patent protection is needed for exclusive rights. 
D)  The largest asset is typically capital intensive Property, Plant and Equipment.

Question 15

Under the Sarbanes-Oxley Act of 2002,financial statements must include both a Management Assessment and an Assurance Opinion.What information do the Management Assessment and an Assurance Opinion provide to financial statement users?

Accepted Answer

The answer of Under the Sarbanes-Oxley Act of 2002,financial statements...

Question 16

______________________________ relates to the relative number of buyers and sellers in a particular industry.

Accepted Answer

The answer of ______________________________ relates to the relative number of...

Question 17

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

Accepted Answer

A)  minimal competition 
B)  extensive competition 
C)  high net income to sales 
D)  differentiated product

Question 18

Which of these is not an intangible asset?

Accepted Answer

A)  trademark 
B)  patent 
C)  equipment 
D)  goodwill

Question 19

Current assets are defined as

Accepted Answer

A)  cash and cash equivalents. 
B)  all assets expected to be quickly used by the firm. 
C)  cash and other assets that the firm expects to sell or consume during the normal operating cycle of a business, usually one year. 
D)  cash and other assets that the firm expects maintain for a period including the normal operating cycle of a business, usually one year.

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