Question 1

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 2

The threat of new entrants is measured by whether there are entry barriers,such as capital investment,________________________________________,patents,or regulation that inhibit new entrants.

Accepted Answer

The answer of The threat of new entrants is measured...

Question 3

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

Accepted Answer

The answer of The fourth step in financial statement analysis...

Question 4

Why is the operating activities section of the statement of cash flows often believed to be the most important part of the statement?

Accepted Answer

The operating activities section of the statement of cash flows provides important information about a company's ability to generate cash from its primary business operations. This is crucial as it reflects the company's ability to pay its current obligations, invest in future growth, and pay dividends to shareholders. The other options are not accurate as the operating activities section does not provide information about dividends paid, net increase or decrease in cash, or how operations have been financed.

Question 5

Which of the following is not considered to be a liability?

Accepted Answer

Cost of goods sold is an expense, not a liability. Liabilities are obligations the company needs to settle in the future, while expenses are costs incurred in the process of earning revenue.

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.

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

Question 7

When identifying the strategies that a particular firm pursues to gain a competitive advantage it is important to determine if its products are designed to meet the needs of a specific market segment or are they intended for a(n)_____________________________________________.

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The answer of When identifying the strategies that a particular...

Question 8

Another important step in financial statement analysis is to assess the quality of a firm's _____________________________ and if necessary adjust them for such characteristics as sustainability or comparability.

Accepted Answer

The answer of Another important step in financial statement analysis...

Question 9

Assets for a particular business might include:

Accepted Answer

Assets for a business include items that provide future economic benefits, such as cash, inventories, and goodwill. Retained earnings, common shareholders' equity, and accumulated other comprehensive income are equity accounts, while accounts payable is a liability.

Question 10

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

Accepted Answer

The principal provisions of the Sarbanes-Oxley Act of 2002 include A, B, and C. However, D is not a provision of the act. The FASB (Financial Accounting Standards Board) does not have oversight or enforcement authority over the SEC (Securities and Exchange Commission). The FASB is an independent organization responsible for setting accounting standards in the U.S. while the SEC is a government agency responsible for enforcing securities laws and regulating the securities industry.

Question 11

Accounts payable represent:

Accepted Answer

Accounts payable are amounts owed by the company to its suppliers for past purchases.

Question 12

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

Accepted Answer

The income statement shows a company's revenues and expenses during an accounting period, allowing for the calculation of its profit or loss, which is the primary indicator of earnings performance. The balance sheet shows a company's assets, liabilities, and equity at a specific point in time, and the statement of cash flows details the sources and uses of a company's cash during an accounting period. The management assessment is not a financial statement and does not provide objective financial information about a company's earnings performance.

Question 13

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

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

Question 14

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

Accepted Answer

The balance sheet equation in the United Kingdom takes the form of Noncurrent Assets + [Current assets - Current Liabilities] - Noncurrent Liabilities = Shareholders' Equity. This equation is also known as the statement of financial position and shows the financial position of a company at a specific point in time.

Question 15

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

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

Question 16

The two categories of shareholders' equity usually found on the balance sheet of a corporation are:

Accepted Answer

The two categories of shareholders' equity usually found on the balance sheet of a corporation are common stock and retained earnings. Common stock represents the amount of money that shareholders have invested in the company through the purchase of stock, while retained earnings represent the accumulated profits of the company that have been kept within the business rather than paid out as dividends.

Question 17

Net income is equal to:

Accepted Answer

Net income is calculated by subtracting expenses and losses from revenues and gains. This is also known as the "bottom line" of the income statement, representing the profit earned by a company during a specific period. Choices A, C, and D do not accurately reflect the calculation of net income.

Question 18

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

Accepted Answer

Depreciation is a noncash expense that is subtracted from revenue when calculating net income. Since it is not a cash transaction, it is classified as an operating activity on the statement of cash flows.

Question 19

Normally,intense rivalries have a tendency to reduce ____________________.

Accepted Answer

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Question 20

The Second step in financial statement analysis requires businesses to analyze strategies that will __________________________ itself from the firms' competitors.

Accepted Answer

The answer of The Second step in financial statement analysis...

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