Question 1

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

Question 2

On the statement of cash flows,depreciation would be classified as?

Accepted Answer

A)   A financing activity.
B)   An operating activity.
C)   An investing activity.
D)   A noncash activity. B

Question 3

___________________________________ equals net income for a period plus or minus the changes in shareholders' equity accounts other than from net income and transactions with owners.

Accepted Answer

Comprehensive income

Question 4

The primary purpose of the balance sheet is to:

Accepted Answer

A)   Report the current value of the business.
B)   Measure the net income of a business up to a particular point in time.
C)   Report the difference between cash inflows and cash outflows for the period.
D)   Report the financial position of the reporting entity at a particular point in time.

Question 5

How easily can customers switch to substitute products is a question one might ask when assessing the ___________________________________.

Accepted Answer

The answer of How easily can customers switch to substitute...

Question 6

The tools of effective financial statement analysis are 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 7

All of the following are principal provisions of the Sarbanes-Oxley Act of 2002 except:

Accepted Answer

A)   At least one member of the audit committee of the board of directors must be a "financial expert."
B)   The lead audit or coordinating partner and the reviewing partner of the public accounting firm must rotate,or change,every five years.
C)   The firm's chief executive officer and the chief financial officer must issue a statement along with the audit report stating that the financial statements and notes fairly present the operations and financial position of the firm.
D)   The FASB has oversight and enforcement authority over the SEC.

Question 8

Describe what is meant by income from continuing operations?

Accepted Answer

The answer of Describe what is meant by income from...

Question 9

An example of an intangible asset is:

Accepted Answer

A)   A patent
B)   Land
C)   Investment in another company
D)   Raw material inventory

Question 10

When assessing buyer power using Porter's five forces,which of the following is not consistent with low buyer power?

Accepted Answer

A)   Brand loyalty
B)   Control of distribution channel
C)   Large number of suppliers
D)   Low price

Question 11

Labor contracts and purchase order commitments are examples of ____________________ contracts.

Accepted Answer

The answer of Labor contracts and purchase order commitments are...

Question 12

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 13

Which forces typically represent vertical competition in a value chain?

Accepted Answer

A)   Potential entry and substitutes.
B)   Buyer power and rivalry among existing firms
C)   Supplier power and potential entry.
D)   Buyer power and supplier power

Question 14

Which forces typically represent horizontal competition in a value chain?

Accepted Answer

A)   Rivalry among existing firms and supplier power.
B)   Potential entry and buyer power.
C)   Substitutes and potential entry.
D)   Buyer power and supplier power.

Question 15

Identify Porters' Five Forces?

Accepted Answer

The answer of Identify Porters' Five Forces?...

Question 16

What are three activities reported in the statement of cash flows and what information does each activity provide?

Accepted Answer

The answer of What are three activities reported in the...

Question 17

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 18

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 19

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 20

When attempting to identify the economic characteristics of the industry in which a particular firm participates an analyst might ask which of the following questions?

Accepted Answer

A)   Does technological change play an important role in the firm maintaining a competitive advantage?
B)   Has the firm diversified across several geographic markets?
C)   Has the firm recognized revenues at the proper time?
D)   Has the firm structured transactions to make it look more profitable than economic conditions suggest?

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