6. What item is included in the notes to the financial statements? *

a. The auditor's report.

b. The management discussion and analysis.

c. The Form 10-K report.

d. A summary of the firm's accounting policies.

7. How are marketable securities valued on the balance sheet? *

a. Historical cost.

b. At cost or fair value depending on how the securities are classified.

c. Market value.

d. At fair value with the difference between cost and fair value reported as revenue.

8. What type of audit report indicates that the financial statements present fairly the financial position, results of operations and the cash flows for the accounting period? *

a. A disclaimer of opinion.

b. An unqualified report.

c. A qualified report.

d. An adverse opinion.

9. Which of the following items would not be discussed in the management discussion and analysis? *

a. Commitments for capital expenditures.

b. The internal and external sources of liquidity.

c. The market value of all assets.

d. A breakdown of sales increases into price and volume components.

10. What types of information cannot be found in the financial statements? *

a. Reputation of the firm, morale of employees and prestige in the community.

b. Nature and terms of off-balance sheet financing arrangements.

c. Disclosures about segments of an enterprise.

d. Disclosures about the fair value of financial instruments.