ACC 4356 SP2019
Exam 1 Practice
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers
... [Show More] the
question.
1) A company's financial statements reflect information about: 1)
A) economic events that affect a company that can be translated into accounting
numbers.
B) product information and competitive positions.
C) the general economy of the industry in which the company operates.
D) future projections of sales, expenses, and other future economic events.
Answer: A
Explanation: A)
B)
C)
D)
ID: FRA07REV 1-17
Topic: Financial statementsAs sources of information
2) Which of the following statements is not correct regarding a company's financial
statements?
2)
A) They may present a picture of the company at a moment in time.
B) They reflect economic events that affect the company.
C) They are comparable to the statements of other companies as all publicly held
companies follow the very precise science of accounting.
D) They may describe changes that took place over a period of time.
Answer: C
Explanation: A)
B)
C)
D)
ID: FRA07REV 1-24
Topic: Financial statementsAs sources of information
1
3) Which is not correct regarding Regulation Fair Disclosure (Reg FD)? 3)
A) It limits what management can say in private conversations with analysts and
investors.
B) It helps level the playing field between individual and insitutional investors.
C) It was passed by the SEC.
D) It does not limit what management can say in private conversations with analysts
or investors.
Answer: D
Explanation: A)
B)
C)
D)
ID: FRA07REV 1-26
Topic: Financial statementsDisclosure costs and benefits
4) Which statement below describes efficient market investors? 4)
A) They believe that any new development is quickly and correctly reflected in the
stock price.
B) They presume they have no insight beyond the share price.
C) They use financial statements to assess risk and dividend yields to make portfolio
decisions.
D) All of these answer choices are correct.
Answer: D
Explanation: A)
B)
C)
D)
ID: FRA07REV 1-40
Topic: Financial statementsFor decision-maker needs
5) Employees demand financial information for all of the following except: 5)
A) Monitoring how much the senior executives earn.
B) Monitoring union contracts that link negotiated wage increases to company
financial performance.
C) Monitoring profit sharing and stock ownership plans.
D) Monitoring the health of company pension plans.
Answer: A
Explanation: A)
B)
C)
D)
ID: FRA07REV 1-38
Topic: Financial statementsFor decision-maker needs [Show Less]