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Unformatted text preview: Question Paper Financial Statement Analysis (CFA560): October 2008 Answer all 70 questions. Marks are indicated against each question. Total Marks : 100 1. Increase in equity from incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity except those that result from expenses or distribution to owners is known as (a) Gains (b) Revenues (c) Liabilities (d) Equity (e) Assets. (1 mark) <Answer > 2. In a business combination which is accounted by using purchase accounting method, if the actual cost for the acquirer exceeds the fair value of the identifiable assets, the excess is recorded as (a) Additional paid-in capital (b) Capital reserve (c) Goodwill (d) General reserve (e) Deferred expenditure. (1 mark) <Answer > 3. Which of the following statements is false with respect to concept of capital and capital maintenance? (a) Capital is the contribution made by the owner(s) in the business (b) Capital is regarded as a liability to the business in the nature of owner’s equity (c) The main feature of the concept is the distinction between the owner(s) and that of the business owned by them (d) Income is the increase in capital which cannot be withdrawn bereft of any distortion of the capital (e) The method of ascertaining and reporting results of business helps in comprehending the concept of capital maintenance. (1 mark) <Answer > 4. Which of the following factors is/are the cause(s) for the diversity in accounting practices of different countries? I. Cultural differences. II. Inflation. III. Political and economic factors. (a) Only (I) above (b) Both (I) and (II) above (c) Both (I) and (III) above (d) Both (II) and (III) above (e) All (I), (II) and (III) above. (1 mark) <Answer > 5. Which of the following elements of financial statements relate to the financial position of the company? (a) Expenses (b) Assets (c) Incomes (d) Gains (e) Losses. (1 mark) <Answer > 6. Which of the following items is not shown in the statement of shareholders equity? (a) Treasury shares (b) Employee stock ownership plan adjustments (c) Cumulative translation allowance (d) Proposed dividend (e) Valuation allowance. (1 mark) <Answer > 7. Which of the following functions can an auditor perform along with the audit work as per the Sarbanes-Oxley Act 2002? (a) Human resource services (b) Book keeping (c) Verification of internal controls (d) Actuarial services (e) Investment management. (1 mark) <Answer > 8. Which of the following statements is false with reference to harmonization of accounting standards? (a) It is needed for the development of global market (b) It makes international financial market more efficient (c) It helps for evaluating multinational companies performance (d) It is not useful to the developing countries (e) It minimizes the cost of preparation of financial reports. (1 mark) <Answer > 9. Which accounting method is prescribed, when investor has significant influence over investee?Which accounting method is prescribed, when investor has significant influence over investee?...
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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.
- Fall '09