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Mock Test 2 — Topic 3: Financial Statement Analysis

Kết quả: 10/22 (45%) Nguồn: SAPP CFA1 Revision Mock Test 2 Liên kết: FSA

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Câu 31

Question 31: For a U.S. GAAP reporting firm, an analyst should add interest expense net of tax to cash flow from operations when calculating free cash flow:

(A) to equity and free cash flow to the firm.

(B) to equity, but not free cash flow to the firm.

(C) to the firm, but not free cash flow to equity.

Câu 34

Question 34: Assuming no tax effects of the capitalization decision, in the period when a firm makes an expenditure, capitalizing the expenditure instead of recognizing it as an expense will result in higher:

(A) debt-to-equity and debt-to-assets ratios.

(B) net income and have no effect on total cash flows.

(C) cash flow from investing and lower cash flow from operations.

Câu 35

Question 35: Under U.S. GAAP, which of the following statements about classifying cash flows is most accurate?

(A) Cash received from issuing long-term debt or stock is considered a financing cash flow.

(B) Income taxes paid are considered financing or investing cash flows if they arise from financing or investing activities.

(C) Dividend payments made are financing cash flows, while interest payments received are investing cash flows.

Câu 40

Question 40: GreenCo, a U.S. -based manufacturing firm, reports a deferred tax liability on its balance sheet. The deferred tax liability most likely results from GreenCo’s:

(A) use of the last-in-first-out inventory accounting method for its financial statements.

(B) use of straight line depreciation for financial reporting and accelerated depreciation for tax purposes.

(C) decision to expense restructuring costs on its income statement even though the funds have not been paid.

Câu 41

Question 41: A profitable company can increase its return on equity (other things equal) by:

(A) decreasing its asset turnover.

(B) increasing its financial leverage.

(C) decreasing its ratio of EBT to EBIT.

Câu 45

Question 45: Beena, Inc. purchases equity securities of Bear Trading for €120,000 and designates them as measured at fair value through other comprehensive income. By year-end, the securities’ market value is €150,000. At year-end:

(A) a €30,000 gain will appear on Beena’s income statement.

(B) the investment will be valued at €120,000 on Beena’s balance sheet.

(C) Beena’s total asset turnover ratio will be lower as a result of the €30,000 gain.

Câu 49

Question 49: Which of the following is most likely an example of conservative accounting? Decreasing the:

(A) bad debt provision from 10% of receivables to 7%.

(B) valuation allowance on deferred tax assets from $100,000 to $70,000.

(C) estimated salvage value from $10,000 to $7,000 for an asset that is depreciated straight-line.

Câu 53

Question 53: A company has a deferred tax liability (DTL) and a deferred tax asset (DTA) on its balance sheet. The government enacts a decrease in the income tax rate that will take effect next year. This will:

(A) decrease the values of both the DTL and DTA.

(B) decrease the value of the DTL and increase the value of the DTA.

(C) increase the value of the DTL and decrease the value of the DTA.

Câu 56

Question 56: Which of the following is the most accurate definition of capital adequacy in the context of financial analysis of banks?

(A) The ratio of a bank’s liabilities to its central bank reserves.

(B) A comparison of a bank’s liquid assets to certain named liabilities.

(C) A monetary measure of a firm’s risk as a percentage of its equity capital.

Câu 57

Question 57: A firm recognizes the impairment of a tangible asset in the year 20X1. In the year 20X2, the most likely effect is to decrease:

(A) operating cash flow.

(B) depreciation expense.

(C) taxes due to the government.

Câu 58

Question 58: In which step of the financial statement analysis framework should an analyst create adjusted financial statements?

(A) Collect data.

(B) Process data.

(C) Analyze and interpret data.

Câu 62

Question 62: Lewis Equipment Company manufactured a construction crane with an estimated useful life of 20 years and market value of $1 million. Valley Builders leases the crane from Lewis for five years with payments of $100,000 per year. The lease includes an option to buy the crane at the end of the lease. Both parties expect that Valley will exercise the purchase option at the end of the lease term. This lease will be reported on the companies’ financial statements as:

(A) a finance lease by Valley and Lewis.

(B) an operating lease by Valley and Lewis.

(C) an operating lease by Valley and a finance lease by Lewis.

Câu 65

Question 65: Joe’s Supermarket has been experiencing rising product prices, while quantities sold have remained stable. The company uses the LIFO method to account for its inventory. If the company had used the FIFO method, what impact would it have had on the company’s working capital?

(A) No impact on working capital.

(B) Lower working capital.

(C) Higher working capital.

Câu 66

Question 66: Information about the operating profits of a company’s various business segments can be found in the:

(A) income statement.

(B) auditor’s report.

(C) supplementary schedules.

Câu 67

Question 67: Investing cash flows most likely reflect changes in which of the firm’s balance sheet items?

(A) Noncurrent assets.

(B) Noncurrent liabilities and equity.

(C) Current assets and current liabilities.

Câu 71

Question 71: JiffyCo’s tax rate is 40%. JiffyCo purchases a $200 asset with no salvage value which is depreciated on a straight-line basis for four years for tax purposes and five years for financial reporting. At the end of the second year:

(A) JiffyCo’s effective tax rate has decreased.

(B) the asset’s carrying value is greater than its tax base.

(C) the deferred tax liability has a balance of $20.

Câu 74

Question 74: For a firm that reports under IFRS, required disclosures related to inventories most likely include:

(A) effects on income from liquidating inventory.

(B) circumstances of any reversals of inventory writedowns.

(C) the difference between inventory values under LIFO and FIFO.

Câu 78

Question 78: McLoone Company’s basic earnings per share are £1.20. McLoone has £10 million par value of 5% preference shares outstanding that can be converted into 400,000 common shares. Is McLoone required to report diluted earnings per share?

(A) Yes, because the preference shares are dilutive to EPS.

(B) No, because the preference shares are not dilutive to EPS.

(C) Yes, because the preference shares are potentially dilutive to EPS.

Câu 80

Question 80: Gold Plc has recently purchased two other companies, calculating goodwill as follows: Silver Ltd Bronze Ltd Accounting goodwill £78,000 (£37,000) Economic goodwill £74,000 £26,000 What total goodwill should Gold Plc record on its balance sheet from these two acquisitions?

(A) £41,000.

(B) £78,000.

(C) £100,000.

Câu 83

Question 83: For a company with a current ratio greater than one and a quick ratio less than one, what will be the impact on the current ratio and the quick ratio of paying accrued wages?

(A) Both ratios will remain the same.

(B) The current ratio will increase and the quick ratio will decrease.

(C) The current ratio will decrease and the quick ratio will increase.

Câu 84

Question 84: A company that wants to increase its reported net income for the current period would be least likely to:

(A) decrease a valuation allowance.

(B) slow down their payments to suppliers.

(C) increase the expected useful life of a machine.

Câu 89

Question 89: Fiberfast Industries has an inventory turnover ratio of 5, days of receivables of 42, and a payables turnover ratio of 3.5. Fiberfast’s cash conversion cycle is closest to:

(A) 11 days.

(B) 73 days.

(C) 115 days.

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