Multiple Choice Questions:
1. In ongoing businesses, what is normally the highest and best use for nonfinancial assets?
a. In use.
b. In exchange.
c. Both a and b.
d. None of these.

2. Which is the approach most commonly used to value businesses?
a. The income approach.
b. The market approach.
c. The asset approach.
d. All approaches are used equally often.

3. When the asset being valued is a partial, noncontrolling interest in a business, what value is likely to be assigned to it?
a. Less that a pro rata value of the total business.
b. Close to a pro rata value of the total business.
c. More than a pro rata value of the total business.
d. The answer depends on the valuation approach.

4. The single largest area for financial statement fraud involves which of these?
a. Revenues.
b. Inventories.
c. Securities.
d. None of these.

5. Which of the following is not a major objective in studying and analyzing financial reports when valuing a business?
a. Ensuring that all account balances are reasonably stated.
b. Adjusting the business’s financial statements to make them comparable to the financial statements of other businesses.
c. Comparing the business’s financial statements with those of other businesses.
d. All of these are major objectives.