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FIN 586 Exam 1 HW & QUIZ Questions and Complete Solutions Graded A+
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FIN 586 Exam 1 HW & QUIZ Questions and Complete Solutions Graded A+
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FIN 586 Exam 1HW & QUIZ
Questions and
Complete Solutions
Graded A+
Denning [Date] [Course title]
, A firm engages in a new type of financial transaction that has a material effect on its earnings. An analyst
should most likely be suspicious of the new transaction if: - Answer: management has not explained its
business purpose
An accounting entry that updates the historical cost of an asset to current market levels is best
described as - Answer: a valuation adjustment
A furniture store acquires a set of chairs for $750 cash and sells them for $1000 cash. These transactions
are most likely to affect which accounts? - Answer: Purchase: Assets only
Sale: Assets, revenues, expenses, owners' equity
Which of the following is an analyst least likely to rely on as objective information to include in a
company analysis? - Answer: corporate press releases
Information about a company's financial position at a point in time is most likely found in the: - Answer:
balance sheet
The step in the financial statement analysis framework that includes making any appropriate
adjustments to the financial statements and calculating ratios is best described as: - Answer: processing
the data
Which of the following is least likely to be considered a role of financial statement analysis? - Answer:
Assessing the management skill of the company's executives
Which of the following statement analysis and reporting is least accurate? - Answer: Financial
statement analysis focuses on the way companies show their financial performance to investors by
preparing and presenting financial statements
Which of the following is a company least likely required to present according to International
Accounting Standard (IAS) No. 1? - Answer: Disclosures of material events
Two underlying assumptions of financial statements, according to the IASB conceptual framework, are: -
Answer: Going concern and accrual accounting
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