Hard questions
25 important questions on Hard questions
For financial assets classified as available for sale, how are unrealized gains and losses reflected in shareholders’ equity?
A. They are not recognized.
B. They flow through retained earnings.
C. They are a component of accumulated other comprehensive income.
For financial assets classified as trading securities, how are unrealized gains and losses reflected in shareholders’ equity?
A. They are not recognized.
B. They flow through income into retained earnings.
C. They are a component of accumulated other comprehensive income.
For financial assets classified as held to maturity, how are unrealized gains and losses reflected in shareholders’ equity?
A. They are not recognized.
B. They flow through retained earnings.
C. They are a component of accumulated other comprehensive income.
- Higher grades + faster learning
- Never study anything twice
- 100% sure, 100% understanding
For my 1st exam I got a C. Then, I started looking for ways to learn better and I came across Study Smart. Since then I have scored a A+, A, A- and another A. I highly recommend it to everyone who wants to hear it. I am so happy with it!!
I was struggling to finish all my first-year subjects for 3 years. Then I discovered Study Smart, which helped me to finish all of them within 3 months.
Because of StudySmart, things are going well in many ways. Before, I always had study stress and no time for anything. Now I feel calm and confident (because of the program). I used to score a B, now I usually score an A or A+.
Hey Chris, I really want to thank you very much for developing the platform, I usually got around C for my exams, now I scored an A+, an A and a A- !!
Since using Study Smart, my average has increased significantly. I even completed a statistics course with a A+ while I'm bad at statistics. I took on extra courses this year, because of Study Smart. Thanks so much!
Ever since I started studying with StudySmart I passed all my exams !!! No more re-sits!! At first, I was happy with a pass and now I only get good grades. Many thanks!
I aced all the courses I studied with Study Smart. For law, I first scored a D, and now an A! I’m 100% sure that I’ll pass all the courses I study with Study Smart.
I always thought I studied well. My grades were fine. I could never have imagined that applying these study skills would have such a huge and direct impact on my grades, my speed and the pleasure I have in learning.
For the first time, I finally feel totally confident about the way I learn. I have the perfect overview and make great progress in terms of speed and the grades I get. Thanks, Chris!
I immediately started to enjoy learning again, and my grades soared. All of a sudden, everything went better. I highly recommend Study Smart to all students..
Being able to create my materials online made the process of studying so much smoother and quicker. I no longer have to spend a huge amount of my time on creating my summaries.
At first, my notes were a mess. Now I use Study Smart to take my notes in a perfectly structured way. It helps me to save a lot of time and do other things I enjoy.
Students that study with Study Smart get better grades. The system applies all the learning methods in such a way that both well-performing students and students who struggle perform much better.
Hi Chris, I would like to thank you very much. Last year I scored C on a course, and this year I got an A+ thanks to your method! Thank you very much!
The largest effect is that my child is more enthusiastic about school! Every parent wants their children to be happy at school, Study Smart made it happen.
In high school, I failed several exams, and that has really changed now. I actually needed this tool very much back then. Since I started studying with StudySmart, I haven't had any D's. My average score is now an A and those are results I would have never had in the past
With my old method, I passed only 3 out of 8 courses. Since I started taking my notes digitally in Study Smart, I have passed all my courses on the first try. For me, StudySmart takes away the stress of wondering if I will pass or not.
Thanks to StudySmart, I passed all my exams, and with better grades than before! On top of that, I have mastered a very good study method now, which I am confident will help me earn my degree.
A company has total liabilities of GBP35 million and total stockholders’ equity of GBP55 million. Total liabilities are represented on a vertical common-size balance sheet by a percentage closest to:
A. 35 percent.
B. 39 percent.
C. 64 percent.
One appropriate method of preparing a common-size cash flow statement is to show each line item:
A. of revenue and expense as a percentage of net revenue.
B. on the cash flow statement as a percentage of net revenue.
C. on the cash flow statement as a percentage of total cash outflows.
To properly assess a company’s past performance, an analyst requires:
A. high earnings quality.
B. high financial reporting quality.
C. both high earnings quality and high financial reporting quality.
When earnings are increased by deferring research and development (R&D) investments until the next reporting period, this choice is considered:
A. non-compliant accounting.
B. earnings management as a result of a real action.
C. earnings management as a result of an accounting choice.
A high-quality financial report may reflect:
A. earnings smoothing
B. low earnings quality.
C. understatement of asset impairment.
Which attribute of financial reports would most likely be evaluated as optimal in the financial reporting spectrum?
A. Conservative accounting choices
B. Sustainable and adequate returns
C. Emphasized pro forma earnings measures
If a particular accounting choice is considered aggressive in nature, then the financial performance for the reporting period would most likely:
A. be neutral.
B. exhibit an upward bias.
C. exhibit a downward bias.
Which of the following concerns would most likely motivate a manager to make conservative accounting choices?
A. Attention to future career opportunities
B. Debt covenant violation risk in the current period
C. Unexpected strength in the business environment
Which technique most likely increases the cash flow provided by operations?
A. Stretching the accounts payable credit period
B. Applying all non-cash discount amortization against interest capitalized
C. Shifting classification of interest paid from financing to operating cash flows
Which technique most likely increases the cash flow provided by operations?
A. Stretching the accounts payable credit period
B. Applying all non-cash discount amortization against interest capitalize
C. Shifting classification of interest paid from financing to operating cash flows
A. Stretching the accounts payable credit period
Which of the following would most likely signal that a company may be using aggressive accrual accounting policies to shift current expenses to later periods? Over the last five-year period, the ratio of cash flow to net income has:
A. increased each year.
B. decreased each year.
C. fluctuated from year to year.
Overloading distribution channels (“channel stuffing”) would understate:
A. inventories
B. accounts receivable.
C. revenues.
Conservative, rather than aggressive, accounting is most likely associated with
A. increased sustainability of earnings.
B. higher current reported performance.
C. recognition of losses once certain.
Which of the following items is a non-GAAP financial measure?
A. Net income after taxes
B. Income from operations
C. EBITDA
Which of the following approaches will most likely reveal manipulation of financial reporting?
A. Using EBITDA to adjust for non-recurring items
B. Evaluating potential warning signals in isolation
C. Comparing a company’s methods and policies to those of its peers
Which of the following descriptions of financial reporting is considered to be of the highest quality?
A. Within GAAP but with earnings management
B. Within GAAP but with biased choices
C. Outside GAAP but with conservative choices
An analyst would most likely conduct additional analysis when faced with which of the following financial presentations?
A. A non-GAAP financial measure that excludes an expense that is likely to recur
B. Reporting a non-GAAP financial measure in an SEC filing
C. A change from LIFO inventory accounting to FIFO
Compared to a company that uses the FIFO method, during periods of rising prices a company that uses the LIFO method will most likely appear more:
A. liquid.
B. efficient.
C. profitable.
The most accurate statement regarding Annan’s reasoning for requiring Kern to select a competitor that reports under IFRS for comparative purposes is that under US GAAP:
Compared with a company that uses the FIFO method, during a period of rising unit inventory costs, a company using the LIFO method will most likely appear more:
A. liquid.
B. efficient.
C. profitable.
In a period of declining inventory unit costs and constant or increasing inventory quantities, which inventory method is most likely to result in a higher debt-to-equity ratio?
A. LIFO
B. FIFO
C. Weighted average cost
A company that prepares its financial statements using IFRS wrote down its inventory value by €20,000 at the end of year 1. In year 2, prices increased and the same inventory at the end of the year was worth €30,000 more than its value at the end of the prior year. Which of the following statements is most accurate? In year 2, the company’s cost of sales:
A. was unaffected.
B. decreased by €30,000.
C. decreased by €20,000.
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
