CFA 2019 Level 1 SchweserNotes Book Quiz Bank SS 06

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  Question #5 of 82
  Question #8 of 82 Question ID: 414025
  December 31, 2007: Assets 82,000 Liabilities 55,000
  Assets $70,000 Liabilities 45,000
  Alpha Company reported the following financial statement information: December 31, 2006:
  Statement of changes in owners' equity. Disclosures of material events.
  Which of the following is a company least likely required to present according to International Accounting Standard (IAS) No. 1? A summary of accounting policies.
  Journal entries, general ledger, trial balance, financial statements. General ledger, trial balance, general journal, financial statements.
  Which of the following is the best description of the flow of information in an accounting system? Trial balance, general ledger, general journal, financial statements.
  Statements should be prepared at least quarterly. No offsetting of income against expenses unless a standard permits or requires it.
  Which of the following is least likely one of the general requirements for financial statements under IFRS? Statements should be prepared under a going concern assumption.
  C)
  A)
  B)
  A)
  Question #7 of 82 Question ID: 414049
  C)
  B)
  A)
  Question #6 of 82 Question ID: 414028
  C)
  B)
  During 2007:
  Net income ? Dividends 6,000
  Calculate Alpha's net income for the year ended December 31, 2007 and the change in stockholders' equity for the year ended December 31, 2007.
  Net income Change in stockholders' equity $2,000
  A) $5,000 decrease $5,000 $2,000 increase
  B) ($3,000) $2,000 increase
  C)
  Question ID: 414034 Question #9 of 82
  Which of the following statements about financial reporting standards is least accurate? Reporting standards: ensure that the information is "useful to a wide range of users." A) narrow the range within which management estimates can be seen as reasonable.
  B) are disclosed on Form 8K by publicly traded firms in the United States.
  C)
  Question ID: 598952 Question #10 of 82
  A firm buys a machine that it will use in its factory for five years. This purchase is most appropriately classified as a(n): operating activity.
  A) financing activity.
  B) investing activity.
  C)
  Question ID: 414053 Question #11 of 82
  Characteristics of a coherent financial reporting framework are best described as: transparency, consistency, and comprehensiveness.
  A) materiality, comprehensiveness, and aggregation.
  B) consistency, materiality, and transparency.
  C) Question #12 of 82 Question ID: 485773
  A)
  B)
  C)
  Question #13 of 82 Question ID: 414031
  A)
  B)
  C)
  Question #14 of 82 Question ID: 414023
  Which of the following financial reporting choices is permitted under IFRS but not under U.S. GAAP? Excluding actuarial gains and losses from balance sheet pension items.
  Netting deferred tax assets with deferred tax liabilities. Revaluing plant and equipment upward.
  Reading the footnotes to a company's financial statements and the Management Discussion & Analysis is least likely to help an analyst determine: how well the financial statements reflect the company's true performance. the various accruals, adjustments and assumptions that went into the financial statements. the detailed information that underlies the company's accounting system.
  Beta Company reported the following financial statement information: December 31, 2006:
  Assets $58,000 Liabilities 28,000
  December 31, 2007: Assets ? Liabilities 38,000
  During 2007: Stockholder investments 15,500 Net income 18,000 Dividends 7,750 Calculate Beta's total assets and stockholders' equity as of December 31, 2007.
  Total assets Stockholders' A)
  B)
  A)
  The Management Discussion and Analysis (MD&A) portion of the financial disclosure is least likely required to discuss: capital resources and liquidity. unusual or infrequent items. results of operations.
  In the expanded form of the accounting equation, assets equal liabilities plus contributed capital plus: ending retained earnings. beginning retained earnings plus revenue minus expenses. ending retained earnings minus beginning retained earnings.
  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: processing the data. analyzing and interpreting the data. gathering the data.
  $93,750 $55,750 $93,750 $30,000 $79,250 $55,750
  Question #18 of 82 Question ID: 414016
  C)
  B)
  Question #17 of 82 Question ID: 413999
  C)
  C)
  B)
  A)
  Question #16 of 82 Question ID: 414013
  C)
  B)
  A)
  Question #15 of 82 Question ID: 414007
  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?
  Assets, revenue, expenses,
  A) Assets only owners' equity
  B) Assets only Assets and revenues only
  C) Assets, revenue, expenses, Assets and expenses owners' equity
  Question ID: 485772 Question #19 of 82
  According to the IASB Conceptual Framework for Financial Reporting, one of the qualitative characteristics of financial statements is: timeliness.
  A) going concern.
  B) C) faithful representation.
  Question ID: 414047 Question #20 of 82
  Which of the following is least likely a qualitative characteristic accounting information must possess in order to provide useful information to an analyst, according to the IASB Conceptual Framework? Conservatism.
  A) Faithful representation.
  B) Relevance.
  C)
  Question ID: 414057 Question #21 of 82
  Management disclosure of the likely impact of implementing recently issued accounting standards is least likely to: conclude that the standard does not apply.
  A) conclude that the standard will not affect the financial statements materially.
  B) state that the impact of the standard is impossible to determine.
  C)
  A)
  A)
  An increase in an asset account may be balanced by an increase in an owner's equity account. A decrease in a liability account may be balanced by a decrease in another liability account.
  Which of the following least accurately describes a correct use of double-entry accounting? A transaction may be recorded in more than two accounts.
  No effect No effect Increase Increase No effect Increase
  A company collects cash from a customer to settle an account receivable. What effect does this transaction have on the company's total assets and total shareholders' equity? Assets Equity
  IFRS only. both U.S. GAAP and IFRS.
  Significant accounting choices are most likely to be disclosed in the management commentary under: U.S. GAAP only.
  Evaluating the footnotes helps the analyst assess whether management is manipulating earnings. The footnotes disclose whether or not the company is adhering to GAAP.
  Sergey Martinenko is an investment analyst with Profis, Martinenko and Verona. He is explaining to his new assistant, John Stevenson, why it is crucial for an investment analyst to read the footnotes to a firm's financial statement and the Management Discussion and Analysis (MD&A) before making an investment decision. Which rationale is Martinenko least likely to provide to Stevenson regarding the importance of analyzing the footnotes and MD&A? Accruals, adjustments and assumptions are often explained in the footnotes and MD&A.
  B)
  Question #25 of 82 Question ID: 414019
  B)
  C)
  B)
  A)
  Question #24 of 82 Question ID: 485770
  C)
  B)
  A)
  Question #23 of 82 Question ID: 498753
  C)C)
  Question #26 of 82
  Question #29 of 82 Question ID: 414039
  When a publicly traded U.S. company prepares a proxy statement for its shareholders prior to the annual meeting or other shareholder vote, it also files the statement with the SEC as Form: 144. DEF-14A. 8-K.
  Stability. Comprehensiveness.
  Which of the following is least likely to be considered a characteristic of a coherent financial reporting framework? Transparency.
  Revaluing plant and equipment upward. Excluding actuarial gains and losses from balance sheet pension items.
  Which of the following financial reporting choices is permitted under IFRS but not under U.S. GAAP? Netting deferred tax assets with deferred tax liabilities.
  The Management Discussion and Analysis (MD&A) portion of the financial statements: includes audited disclosures that help explain the information summarized in the financial statements. is not required by the SEC. includes such items as discontinued operations and other unusual or infrequent events.
  B)
  A)
  C)
  A)
  B)
  A)
  Question #28 of 82 Question ID: 414054
  C)
  B)
  A)
  Question #27 of 82 Question ID: 414050
  C)
  B)C)
  Question #30 of 82
  Question #33 of 82 Question ID: 414035
  Which description of the objective of financial statements is most accurate? The objective of financial statements is: to provide a wide range of users with information about a firm's financial prospects. to provide securities analysts with objective data about a firm's financial prospects. to provide economic decision makers with useful information about a firm's financial performance and changes in financial position.
  The purchase of equipment for $25,000 cash is most likely to be recorded as: an increase in two asset accounts. an increase in an asset account and an increase in a liability account. an increase in one asset account and a decrease in another asset account.
  Desirable attributes of accounting standard-setting bodies least likely include: making decisions that are in the public interest. having clear and consistent standard-setting processes. operating independently of interested stakeholders.
  The best description of the general ledger is that it: groups accounts into the categories that are presented in the financial statements. sorts the entries in the general journal by account. is where journal entries are first recorded.
  Question #34 of 82 Question ID: 414040
  C)
  B)
  A)
  C)
  A)
  B)
  A)
  Question #32 of 82 Question ID: 414018
  C)
  B)
  A)
  Question #31 of 82 Question ID: 414037
  C)
  B)
  Which of the following is least likely to be considered a stated goal of the International Accounting Standards Board (IASB)?
  B)
  A)
  IASB framework.
  Under which framework for financial reporting systems are the financial statement elements related to performance defined as revenues, expenses, gains, losses, and comprehensive income? FASB framework. Both IASB and FASB frameworks.
  The objective of financial statements is to provide economic decision makers with useful information. Reporting standards focus

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