0804 FSA (CFA560) - Question Paper Financial Statement...

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1 Question Paper Financial Statement Analysis (CFA560): April 2008 Answer all 70 questions. Marks are indicated against each question. Total Marks : 100 1. Which of the following qualitative characteristics is the ability to help users see similarities and differences to evaluate relative financial position and performance of companies? (a) Verifiability (b) Consistency (c) Relevance (d) Neutrality (e) Comparability. (1 mark) <Answer> 2. Which of the following is equal to the residual interest that remains in the assets after deducting an entity’s liabilities? (a) Gains (b) Losses (c) Equity (d) Revenues (e) Expenses. (1 mark) <Answer> 3. Which of the following statements’ preparation is primarily governed by the matching principle? (a) Balance sheet (b) Income statement (c) Statement of comprehensive income (d) Statement of cash flows (e) Statement of stakeholders equity. (1 mark) <Answer> 4. While translating the financial statements of foreign branches of Indian companies, all revenue items other than opening and closing inventories and depreciation must be translated at (a) Spot rate (b) Average rate (c) Notional rate (d) Market rate (e) Book value. (1 mark) <Answer> 5. Expense manipulation can be done by (a) Vendor financing (b) Understating liabilities (c) Trade loading or channel stuffing (d) Not recognizing rebates or discounts (e) Overstatement of value of accounts receivables. (1 mark) <Answer> 6. Timing differences are considered temporary because (a) They are based on different tax rates (b) They affect book income in different years (c) They eventually reverse (d) The costs eventually expire (e) They result in deferred tax asset/liability. (1 mark) <Answer> 7. As per AS-11, the need for foreign currency translation arises (a) In respect of the financial statements of foreign branches of the parent enterprise (b) In respect of the financial statements of the parent enterprise (c) In respect of only the non-monetary items of the foreign branches of the parent enterprise (d) In respect of only the monetary items of the foreign branches of the parent enterprise (e) In respect of only the fixed assets of the foreign branches of the parent enterprise. (1 mark) <Answer>
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2 8. If the yield rate of return of Elina Ltd., is 15.75%, normal rate of return is 9%, paid up value of each equity share is Rs.10 and nominal value of each equity share is Rs.20, the value of an equity share of the company is (a) Rs.20.00 (b) Rs.17.50 (c) Rs.15.75 (d) Rs.35.00 (e) Rs. 5.71. (2marks) <Answer> 9. The following information is provided by Avon Ltd., for the year ended March 31, 2008: Particulars Rs. Share capital 18,00,000 Creditors 2,25,000 Reserves and surplus 4,50,000 Secured loans 3,75,000 The shareholders’ funds were (a) Rs.16,50,000 (b) Rs.18,75,000 (c) Rs.20,25,000 (d) Rs.18,00,000 (e) Rs.22,50,000. (2marks) <Answer> 10. Elixir Ltd., manufactures Product – M. The company has furnished the following information pertaining to its product per unit: Particulars Rs.
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This note was uploaded on 07/20/2010 for the course ICFAI CFA taught by Professor Cfa during the Fall '09 term at Indian School of Business.

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0804 FSA (CFA560) - Question Paper Financial Statement...

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