On a common size basis, which of the following assets is normally largest for a commercial bank? On a common size basis, which of the following assets is normally largest for a electric utility? On the statement of cash flows, an amount paid for utilities would be classified as Opinions on the effectiveness of the internal control system and the fairness of the amounts reported in the financial statements are known as The accrual basis method of accounting can be best described as: The accrual basis of accounting recognizes The following steps make up the steps in financial statement analysis The primary purpose of the balance sheet is to: The second step in financial statement analysis is to identify the company strategy

1. On a common size basis, which of the following assets is normally largest for a commercial bank?

Accounts and Notes Receivable

2. On a common size basis, which of the following assets is normally largest for a electric utility?

Property, Plant and Equipment

3. On the statement of cash flows, an amount paid for utilities would be classified as

an operating activity.

4. Opinions on the effectiveness of the internal control system and the fairness of the amounts reported in the financial statements are known as

Assurance Opinions.

5. The accrual basis method of accounting can be best described as:

The method that matches incurred expenses with related revenues when they are earned. Correct

6. The accrual basis of accounting recognizes

revenue when all or a substantial portion is performed

7. The following steps make up the steps in financial statement analysis

1. Identify the strategies the firm pursues to gain and sustain a competitive advantage.
2. Analyze the current profitability and risk of the firm using information in the financial statements.
3. Value the firm.
4. Identify the economic characteristics and competitive dynamics of the industry in which a particular firm participates.
5. Assess the quality of the firm's financial statements and, if necessary, adjust them for such desirable characteristics as sustainability or comparability.
6. Prepare forecasted financial statements

4,1,5,2,6,3

8. The primary purpose of the balance sheet is to:

report the financial position of the reporting entity at a particular point in time.

9. The second step in financial statement analysis is to identify the company strategy. Which of the following is a question an analyst should ask when performing a strategy analysis?

What is the company's degree of geographical diversification?

10. 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?

Do earnings include revenues that appear mismatched with the business model employed by the firm?