Question: 1 Financial statements analysis is the examination of financial statements

1. Financial statements analysis is the examination of financial statements for the purpose of acquiring additional information.
a. True
b. False

2. To discern unexpected relationships, or the absence of expected relationships, financial statements analysis requires:
a. Insightful and useful comparisons
b. GAAP and non- GAAP material
c. Applied and theoretical calculations
d. Internal and external comparisons

3. What is the mindset employed by a forensic accountant in financial statements analysis?
a. Professional certainty
b. Professional skepticism
c. Reasonable probability
d. Counter- intuitiveness

4. A forensic accountant always works forward, starting at point A and progressing toward point B.
a. True
b. False

5. Which of the following is not a basic financial statement?
a. Statement of cash flows
b. Balance sheet
c. Income statement
d. Schedule M reconciliation

6. A horizontal analysis is conducted by a forensic accountant to identify:
a. Scale
b. Trends
c. Affluence
d. Structure

7. A measure that expresses the average annual growth rate over a multiple- year period is called:
a. Simple interest growth rate
b. Log- linear growth rate
c. Progressive growth rate
d. Compound growth rate

8. The maximum growth rate a company can sustain without obtaining additional financing is called:
a. Compound growth rate
b. Progressive growth rate
c. Sustainable growth rate
d. Measurable growth rate

9. A type of analysis that allows comparison of financial statements for companies of different sizes is called:
a. Comparable financial statement
b. Horizontal financial statement
c. Common- size statement
d. Dependable financial statement

10. In preparing a common- size income statement, the de-nominator in all calculations is:
a. Net income
b. Total assets
c. Operating income
d. Total revenue

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  • CreatedMarch 04, 2015
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