MANCOSAFinancial Reporting and Analysis Jan23 Y1 S2HONOWhich of the following statements about financial statements is true?O A. Adjustments are made to reflect the effect of inflation on the financial results.O B. Some values that are reflected depend on the estimates of management and but will be reported in a similar way across companies.O C. Financial statements have a forward-looking bias.O D. Financial statements do not reflect information that cannot be expressed in monetary terms.Previous page23°C

Financial statements often require management's judgment and estimation for items like depreciation,…

Answered: Which of the following statements about…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Which of the given options, is a limitation of financial reporting? (choose one answer only) a. financial reports can only provided all information needed by its primary users not other users b. financial reports are based on estimates and judgments rather that exact depiction c. financial reports can only provide information to help primary users estimate the value of the entity d. all of these are limitations of financial reporting
Which of the following statements is false? O a. Managerial accounting does not need to conform to GAAP. O b. Managerial accounting sometimes relies on past information. Oc. There is no overlap between financial and managerial accounting. O d. Financial accounting must conform to GAAP.
1. Of the following, choose the one that describes a situation where liabilities and expenses are manipulated to make a company appear less profitable? A. Liabilities are capitalized to increase revenues. B. Failure to record insurance expense for the period. C. Failure to record employee payroll earned but not paid as of period end. D. Failure to record warranty costs when the facts suggest that disclosure is more appropriate accounting treatment. E. None of the above.
9. Technical analysts feel that financial accounting statements lack information, or report it in a way that makes comparisons difficult. Which of the following does not constitute a problem? a. Detailed information concerning sales and expenses by product line. b. Statements of change in financial position. c. Alternative ways of reporting expenses. d. Alternative ways of reporting assets and liabilities. e. The availability of psychological and nonquantitative variables.
Which statement is included in the Conceptual Framework? Relevance is a fundamental qualitative characteristic of useful financial information Financial information without both relevance and faithful representation is not useful All of the above None of the above
Which of the following statements about the process of developing a reformulated Balance Sheet is NOT correct? O 1. Derivative financial liabilities should be classified as financial obligations O 2. Lease interest should be classified as a financial expense O 3. Preference shares should be classified as a financial obligation O 4. Every asset can be clearly classified as an operating asset or financial asset. There is no judgement or uncertainty involved
Accounting data does not consider off-balance sheet items, such as unused commitments of a firm. O True O False
81) Inadequacies of the existing system of financial ratios signify a need for a different approach to monitoring business performance. Of the following statements, which is NOT a shortcoming of financial ratios? a) financial measures are lagging indicators of business performance. b) financial ratios have a short-term orientation and emphasize the cash flow rather than the processes that contribute to cash flow. c) Financial ratios focus equally on the stockholders as on the customers, suppliers and employees. d) A and B e) A and B and C
The results in using ratio analysis may be distorted if _? a. There is inflation. b. The data used are different in the way it was developed. c. The financial statements are not audited. d. All of the above.
Some believe that International Financial Reporting Standards (IFRS) provide too many choices within its accounting guidance. Is this a possible concern in the area of cash flow reporting in your opinion?
What difficulties do differences in accounting standards create for investors?
Which of the following statements is false? a.Financial accounting must conform to GAAP. b.Managerial accounting sometimes relies on past information. c.Managerial accounting does not need to conform to GAAP. d.There is no overlap between financial and managerial accounting.

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