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Question 1 of 10
1. Question
Which of the following best defines inflation?
Correct
Inflation is the chronologically regular, systematic increase in the money supply or in general price levels.
Incorrect
Inflation is the chronologically regular, systematic increase in the money supply or in general price levels.
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Question 2 of 10
2. Question
Sovereign debt can best be defined as:
Correct
Sovereign debt is debt issued by a sovereign government (i.e. not a mere municipality or local government) to foreign issuers.
Incorrect
Sovereign debt is debt issued by a sovereign government (i.e. not a mere municipality or local government) to foreign issuers.
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Question 3 of 10
3. Question
When auditors investigate the truth and reliability of financial statements, they will disclose an opinion on them. What is the best opinion to be offered?
Correct
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.
Incorrect
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.
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Question 4 of 10
4. Question
Which if the following is true about modified opinions?
Correct
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.
There can also be qualified (or modified) opinions, where the auditor provides a significant but relatively minor qualification to the financial statements’ accuracy or reliability, or an adverse opinion, where he discloses a more material error in the financial statements.Incorrect
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.
There can also be qualified (or modified) opinions, where the auditor provides a significant but relatively minor qualification to the financial statements’ accuracy or reliability, or an adverse opinion, where he discloses a more material error in the financial statements. -
Question 5 of 10
5. Question
Financial accounting can be distinguished into different forms, which of the following does not apply?
Correct
Financial accounting can broadly be distinguished into two forms, cash-basis accounting and accrual-basis accounting.
Incorrect
Financial accounting can broadly be distinguished into two forms, cash-basis accounting and accrual-basis accounting.
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Question 6 of 10
6. Question
Which of the following is not among the most commonly used financial ratios?
Correct
While there are many types of financial ratios, the most useful and commonly used are the following: Debt to equity ratio, current ratio (or liquidity ratio), quick ratio.
Incorrect
While there are many types of financial ratios, the most useful and commonly used are the following: Debt to equity ratio, current ratio (or liquidity ratio), quick ratio.
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Question 7 of 10
7. Question
The following equations are correct except:
Correct
debt-to-equity ratio = total liabilities/(owners’ or shareholders’ equity)
current ratio = current assets/current liabilities.
quick ratio = (current assets – inventories)/current liabilities.Incorrect
debt-to-equity ratio = total liabilities/(owners’ or shareholders’ equity)
current ratio = current assets/current liabilities.
quick ratio = (current assets – inventories)/current liabilities. -
Question 8 of 10
8. Question
What is the minimum duration of the cooling off period?
Correct
A company wishing to publicly offer a security must 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.
Incorrect
A company wishing to publicly offer a security must 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.
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Question 9 of 10
9. Question
When an investment company files a registration statement with the SEC, it consists of two parts. These parts are:
Correct
When an investment company files a registration statement with the SEC, it consists of two parts. The first part is the prospectus. The second is the statement of additional information (SAI).
Incorrect
When an investment company files a registration statement with the SEC, it consists of two parts. The first part is the prospectus. The second is the statement of additional information (SAI).
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Question 10 of 10
10. Question
Information about the history of a company is included in:
Correct
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.
Incorrect
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.