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  The third step in financial statement analysis is to assess the quality of the firm's financial statements

Accounting

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1. The third step in financial statement analysis is to assess the quality of the firm's financial statements. Which of the following is a question an analyst should ask when performing this step?
   
   a. Do earnings include revenues that appear mismatched with the business model employed by the firm?
   b. Does the industry include a large number of firms selling similar products?
   c. What is the company's degree of geographical diversification?
   d. Are industry sales growing rapidly or slowly?
2. Which of the following is a question an analyst would ask when assessing the quality of a firm's financial statements?
   
   a. Has the firm integrated forward into retailing to final consumers?
   b. Are the company's products designed to meet a specific market segment?
   c. Do earnings include nonrecurring gains or losses?
   d. Is the firm diversified across several geographical markets?
3. Which of the following is not an activity reported in the Statement of cash Flows?
   
   a. Investing
   b. Financing
   c. Manufacturing
   d. Operating
4. Which of the following economic characteristics is consistent with a grocery store chain?
   
   Select one:
   a. Minimal competition
   b. Extensive competition
   c. Differentiated product
   d. High net income to sales
5. The accrual basis of accounting recognizes:
   Select one or more:
   a. Revenue when cash is received from customers
   b. Revenue when contracts are signed
   c. Revenue when all or a substantial portion is performed
   d. Expenses when paid
6. Which of the following is not one of Porter's five forces?
   Select one or more:
   a. Threat of Regulation
   b. Supplier Power
   c. Threat of Substitutes
   d. Buyer Power
7. Which of the following would not appear as a liability on the balance sheet?
   Select one or more:
   a. Accounts payable
   b. Salary due employees at year-end
   c. A note due to a bank
   d. A labor contract
8. On a common size basis, which of the following assets is normally largest for a commercial bank?
   Select one or more:
   a. Accounts and Notes Receivable
   b. Cash and Marketable Securities
   c. Property, Plant and Equipment
   d. Inventory
9. The cash basis method of accounting can be best described as:
   Select one or more:
   a. The method that equates assets with liabilities and owners' equity.
   b. The method that recognizes revenue when money is received and expenses when money is paid.
   c. The recording of transactions and adjustments so that debits equal credits.
   d. The method that matches incurred expenses with related revenues when they are earned.
10. An example of an intangible asset is:
    Select one or more:
    a. Investment in another company
    b. A patent
    c. Raw material inventory
    d. Land