Chapter 3, Problem 6DYS

MULTIPLE CHOICE. Choose the best answer among the following choices. 6. The financial statements should be stated in terms of a common financial denominator. A. Accrual B. Going Concern C. Time Period D. Stable Monetary Unit 7. The principle of objectivity includes the concept of A. Summarization B. Verifiability C. Classification D. Conservatism 8. The financial accounting information is directed toward the common needs of users and is independent of presumptions about particular needs and desires of specific users. A. Completeness B. Verifiability C. Relevance D. Neutrality 9. The attribute of relevance include ALL EXCEPT: A. Predictive value B. Feedback value C. Materiality D. Neutrality 10. The assumption that an entity will continue to operate for the foreseeable future is called A. Accrual basis B. Comparability C. Going concern D. Cash basis

Provide the best word/s to describe each of the statements below.  In order for financial statements to be useful to the different users, it should represent the financial performance, financial position and cash flows of the reporting entity. Information in the financial statements is relevant when it influences the economic decisions of users by helping them evaluate past, present of future events relating to an entity and by confirming or correcting past evaluations they have made. Users must be able to compare the financial statements of an entity over time, so that they can identify trends in its financial position and performance. The expense incurred when trading inventory previously purchased is sold. A = O+ L According to this principle, the books of account should not reflect the personal affairs of the wealth of the owner(s) outside of the business. It assumes that the books of the business are drawn up to reflect the wealth (or equity) of the owner inside his…

Explain two (2) challenges when analyzing and interpreting the financial performance of different entities over a specified period of time.

What is the purpose of financial statement analysis? State four main analysis areas that would be completed on a financial statement. State the four standards for comparison in analysis. What are the three tools used to do analysis of financial statements?

Which 2 of these datasets can be visualized using custom charts in the Performance Center? Accounts receivable Return on assets Inventory turnover Expenses Debt to Equity

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Ratios are an input into which step in the financial statement analysis framework? a. Collect input data b. Process data  c. Analyze/interpret the processed data

A number of issues are faced in the area of financial reporting. Select four issues that you consider are the most important, justify your choice, describe the issue and offer suggestions as to how improvements could be made.

Horizontal analysis involves: 32 Multiple Choice Comparing individual financial statement line items with each other to understand the relationships between line items. Comparing individual financial statement line items to some benchmark, typically similar competitors' financial statement line items. Comparing individual financial statement line items over time. Comparing individual financial statement line items that have been arranged horizontally from highest to lowest dollar amounts.