Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
Certdemy Free Practice Questions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
Which of the following statements is/are included in the Economic indicators?
I. GDP, or gross domestic product, a measure of a nation’s total output
II. business overflow such that a nation’s imports exceed its exports
III. Balance of payments, or records of dealings between a given country and all other countries with whom it has done business
IV. Employment indicators, such as the national unemployment rateCorrect
Economic indicators
The five most commonly used and generally accepted as the most useful indicators include the following:
• GDP, or gross domestic product, a measure of a nation’s total output
• Employment indicators, such as the national unemployment rate
• Trade deficit, or conditions such that a nation’s imports exceed its exports
• Balance of payments, or records of dealings between a given country and all other countries with whom it has done business
• CPI, or consumer price index, a measure of inflationIncorrect
Economic indicators
The five most commonly used and generally accepted as the most useful indicators include the following:
• GDP, or gross domestic product, a measure of a nation’s total output
• Employment indicators, such as the national unemployment rate
• Trade deficit, or conditions such that a nation’s imports exceed its exports
• Balance of payments, or records of dealings between a given country and all other countries with whom it has done business
• CPI, or consumer price index, a measure of inflation -
Question 2 of 10
2. Question
Which of the following statements is true regarding financial statements?
I. Financial statements are transcribed reports of a company’s financial status
II. Investors use financial statements to make informed decisions about investing in those companies
III. Statement of cash flows, balance sheet and audit comment are the three main parts to a financial statement
IV. Two of them are the balance sheet and the income statementCorrect
Financial statements
Financial statements are transcribed reports of a company’s financial status. Investors use financial statements to make informed decisions about investing in those companies. There are three main parts to a financial statement. They are the income statement, the balance sheet, and the statement of cash flows.Incorrect
Financial statements
Financial statements are transcribed reports of a company’s financial status. Investors use financial statements to make informed decisions about investing in those companies. There are three main parts to a financial statement. They are the income statement, the balance sheet, and the statement of cash flows. -
Question 3 of 10
3. Question
Which of the following statements is true regarding auditor disclosures?
I. Audits ensure that some representation made by a company to a third party or to the public are true and reliable
II. Audits frequently involve ensuring that the financial statements of a publicly-traded company are reliable for the public to depend on them in making investment decisions
III. When auditors investigate the truth and reliability of financial statements, they will conceal an opinion on them
IV. The best opinion to be offered is a qualified (or modified) opinion, where the auditor states that in his professional judgment without qualificationCorrect
Auditor disclosures
Audits ensure that some representation made by a company to a third party or to the public are true and reliable. Audits frequently involve ensuring that the financial statements of a publicly-traded company are reliable for the public to depend on them in making investment decisions, in particular their conformity with GAAP. When auditors investigate the truth and reliability of financial statements, they will disclose an opinion on them. The best opinion to be offered is an unqualified (or unmodified) opinion, where the auditor states that in his professional judgment without qualification (or modification), the financial statements represent reality and conform to GAAP.Incorrect
Auditor disclosures
Audits ensure that some representation made by a company to a third party or to the public are true and reliable. Audits frequently involve ensuring that the financial statements of a publicly-traded company are reliable for the public to depend on them in making investment decisions, in particular their conformity with GAAP. When auditors investigate the truth and reliability of financial statements, they will disclose an opinion on them. The best opinion to be offered is an unqualified (or unmodified) opinion, where the auditor states that in his professional judgment without qualification (or modification), the financial statements represent reality and conform to GAAP. -
Question 4 of 10
4. Question
Which of the following statements is true regarding different bases of financial accounting?
I. Financial accounting can broadly be distinguished into two forms, cash-basis accounting and accrual-basis accounting
II. Cash-basis accounting is quite commonsense, as it reports events and transactions only when cash is actually disbursed or received by an entity
III. This stands for accrual-basis accounting, where events and transactions are not reported only when revenues are earned and expenses incurred
IV. For instance, accrual-basis accounting would record a sale when the customer pledges to pay for a good, while cash- basis accounting would record it only when the customer actually paysCorrect
Different bases of financial accounting
Financial accounting can broadly be distinguished into two forms, cash-basis accounting and accrual-basis accounting. Cash-basis accounting is quite commonsense, as it reports events and transactions only when cash is actually disbursed or received by an entity. This stands opposed to accrual-basis accounting, where events and transactions are reported only when revenues are earned and expenses incurred. For instance, accrual-basis accounting would record a sale when the customer pledges to pay for a good, while cash- basis accounting would record it only when the customer actually pays. There can also be other bases of accounting, where certain events or transactions are subject to cash-basis rules and others to accrual-basis rules.Incorrect
Different bases of financial accounting
Financial accounting can broadly be distinguished into two forms, cash-basis accounting and accrual-basis accounting. Cash-basis accounting is quite commonsense, as it reports events and transactions only when cash is actually disbursed or received by an entity. This stands opposed to accrual-basis accounting, where events and transactions are reported only when revenues are earned and expenses incurred. For instance, accrual-basis accounting would record a sale when the customer pledges to pay for a good, while cash- basis accounting would record it only when the customer actually pays. There can also be other bases of accounting, where certain events or transactions are subject to cash-basis rules and others to accrual-basis rules. -
Question 5 of 10
5. Question
Which of the following statements is true regarding financial ratios?
I. Financial ratios are a comparison of four different numbers taken from financial statements
II. They provide the investor with quick information to help make an informed decision
III. The information they provide is very broad and not entirely precise
IV. There are two types of most useful and commonly used financial ratiosCorrect
Financial ratios
Financial ratios are a comparison of two specific numbers taken from financial statements. They provide the investor with quick information to help make an informed decision, but the information they provide is very broad and not entirely precise. While there are many types of financial ratios, the most useful and commonly used are the following:
• The debt-to-equity ratio is a measurement of a company’s liabilities (debt) compared to owners’ or shareholders’ equity. T
• The current ratio, or liquidity ratio, gives the investor a snapshot of the company’s current condition by comparing current assets to current liabilities.Incorrect
Financial ratios
Financial ratios are a comparison of two specific numbers taken from financial statements. They provide the investor with quick information to help make an informed decision, but the information they provide is very broad and not entirely precise. While there are many types of financial ratios, the most useful and commonly used are the following:
• The debt-to-equity ratio is a measurement of a company’s liabilities (debt) compared to owners’ or shareholders’ equity. T
• The current ratio, or liquidity ratio, gives the investor a snapshot of the company’s current condition by comparing current assets to current liabilities. -
Question 6 of 10
6. Question
Which of the following statements is true regarding the quick ratio?
Correct
The quick ratio helps investors determine short-term liquidity by comparing current assets less inventory to current liabilities. This ratio tends to give a truer picture of the company’s condition than the current ratio because it excludes inventory from the equation. Some companies struggle to move inventory, and this can prove problematic when figuring liquidity with the current ratio. The quick ratio is figured as follows: quick ratio = (current assets – inventories)/current liabilities.
Incorrect
The quick ratio helps investors determine short-term liquidity by comparing current assets less inventory to current liabilities. This ratio tends to give a truer picture of the company’s condition than the current ratio because it excludes inventory from the equation. Some companies struggle to move inventory, and this can prove problematic when figuring liquidity with the current ratio. The quick ratio is figured as follows: quick ratio = (current assets – inventories)/current liabilities.
-
Question 7 of 10
7. Question
Which of the following statements is true regarding Initial public offering (IPO)?
Correct
Initial public offering
An initial public offering, or IPO, describes the initial sale of stock to the public by a company that was formerly privately held. IPOs are usually used by a small or new company pursuing additional capital to expand operations but are also occasionally employed by larger private companies wanting to be publicly traded. Any company seeking to offer an IPO must first register with the Securities and Exchange Commission, or the SEC.Incorrect
Initial public offering
An initial public offering, or IPO, describes the initial sale of stock to the public by a company that was formerly privately held. IPOs are usually used by a small or new company pursuing additional capital to expand operations but are also occasionally employed by larger private companies wanting to be publicly traded. Any company seeking to offer an IPO must first register with the Securities and Exchange Commission, or the SEC. -
Question 8 of 10
8. Question
Which of the following statements is true regarding IPO?
Correct
There are several steps required to publicly offer a security:
1. The company must submit a registration statement to the SEC containing valid information about the issuance of the security, such as the purpose of the issue, public offering price, balance sheet, and so on.
2. The company must then undergo to a twenty-day cooling-off period in which the SEC reviews and requires additions or corrections to the registration statement. Twenty days is a minimum; cooling periods can last for many months, while the proper changes are made. During this time, a preliminary or red herring prospectus may then be made available to potential buyers of the security who have acknowledged interest. This enables the investor to become familiar with the issue, but it is not yet available for public purchase.
3. After the cooling period ends, the security reaches the effective date, and the security is now available for sale. Investors must now be furnished with a final prospectus that summarizes the information in the registration statement in an abbreviated format.Incorrect
There are several steps required to publicly offer a security:
1. The company must submit a registration statement to the SEC containing valid information about the issuance of the security, such as the purpose of the issue, public offering price, balance sheet, and so on.
2. The company must then undergo to a twenty-day cooling-off period in which the SEC reviews and requires additions or corrections to the registration statement. Twenty days is a minimum; cooling periods can last for many months, while the proper changes are made. During this time, a preliminary or red herring prospectus may then be made available to potential buyers of the security who have acknowledged interest. This enables the investor to become familiar with the issue, but it is not yet available for public purchase.
3. After the cooling period ends, the security reaches the effective date, and the security is now available for sale. Investors must now be furnished with a final prospectus that summarizes the information in the registration statement in an abbreviated format. -
Question 9 of 10
9. Question
Which of the following statements is true regarding registration statement?
Correct
Registration statement
When an investment company files a registration statement with the SEC, it consists of two parts. The first part is the prospectus. This is the information that every potential investor in the company must be provided with before they’re allowed to purchase the company’s shares. The prospectus is also known as a summary prospectus, or an NI-A prospectus. The second part is the information that must be on file with the SEC and available for public inspection, but is not required to be provided to all potential investors. It is also called the statement of additional information (SAI).Incorrect
Registration statement
When an investment company files a registration statement with the SEC, it consists of two parts. The first part is the prospectus. This is the information that every potential investor in the company must be provided with before they’re allowed to purchase the company’s shares. The prospectus is also known as a summary prospectus, or an NI-A prospectus. The second part is the information that must be on file with the SEC and available for public inspection, but is not required to be provided to all potential investors. It is also called the statement of additional information (SAI). -
Question 10 of 10
10. Question
Which of the following statements is true regarding SAI?
Correct
SAI
All information that an investment company is required to provide to investors before they purchase shares in the company is provided in the prospectus. However, some investors and members of the public may desire additional information about the company beyond what’s provided in the prospectus. This additional information, such as the history of the company, or a detailed financial profile, are in the statement of additional information (SAI), and must be provided to potential investors upon request. These days, the SAI is commonly provided on the company website.Incorrect
SAI
All information that an investment company is required to provide to investors before they purchase shares in the company is provided in the prospectus. However, some investors and members of the public may desire additional information about the company beyond what’s provided in the prospectus. This additional information, such as the history of the company, or a detailed financial profile, are in the statement of additional information (SAI), and must be provided to potential investors upon request. These days, the SAI is commonly provided on the company website.